Network Insight Institute

Colin Griffith

Colin Griffith, President AIMIA

[The challenge of investment] is a big issue for new media content and here we have a double hurdle. We have the hurdle of investing in new media content to start with, and then there is the second hurdle of investing in Australian new media content. The first hurdle is big enough at the moment. Anyone from the venture capital (VC) industry will tell you that the last thing that they would ever invest in is content. They may invest in tools underlying content applications; but the last thing that they'll actually invest in, and particularly now, is content. So can you imagine the response if you want someone to invest in Australian new media content, let alone US new media content? Even the US VC industry won't invest in US content now.

It is interesting that even during the dot com boom there wasn't much money being invested in content per se. People tend to think that the dot com boom was primarily about money being spent on content. Yes, there were some spectacular investments and spectacular crashes, the Kgrinds and Scapes, for example. But in some ways they were an aberration, because most of the money went into things like telcos and ISPs, more the pipes, infrastructure, tools and software, than the content. Even where money did go into content, a large component funded the technology behind the scenes.

I think that one of the biggest challenges is exports. As indicated by the figures I quoted before, if you look at what's happening on those Internet pipes going to the States, generally we are sucking in the content. We are not sending a lot of content back. US people are not filling up those pipes, sucking back Australian content to the US. Two-way traffic is almost non-existent. Yes, there is a degree of US traffic to Australian websites but by and large that's fairly small, a couple of per cent on average. Interestingly, a federal government report looking at Australia's service industries and export opportunities quotes multimedia content as one of those areas where Australia has got great expertise and creative nous. The report suggests that that's the area where Australia stands to reap benefits from exporting content to the world. But there is a different picture if you actually look at what's happening on the ground. One reason for that is that the US market is incredibly insular, as you all would have found from experiences with music, film or particularly broadcasting. It is very, very difficult to export broadcasting content to the States.

Another big challenge: how do we harness the obvious skills, talent and expertise in the Australian industry and how do we get the investment into those industries? How do we create content that Australians want to use? And how do we create content that can earn revenue, particularly export revenue, either through Americans coming to visit Australian sites or Australian content being licensed off-shore.
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I think perhaps one of the biggest challenges that we're about to face here relates to the impact of broadband interactive TV and where we want Australian content to be on those new platforms. Broadband has become the sexy new topic - it was the Internet and now it's broadband. Broadband will have a significant impact in Australia. Australia is a very small market with perhaps 150,000 consumer users, but that is projected to rise to several million over the next four to five years. An interesting aspect of broadband is that it is much more entertainment-based than the information-heavy Internet. Entertainment - traditional media content - becomes much more viable in that environment. The figures from the States show that once people take broadband, whatever their reason for taking it, their use of streaming doubles almost overnight. And most of that streaming involves entertainment-related content or news-related content. So broadband is interesting in that it does skew Internet use from where it is now.

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