Network Insight Institute

Kim Anderson

Kim Anderson, COO Southern Star Entertainment

Kim Anderson recently joined Southern Star as Chief Operating Officer.  Her career spans a wide range of media development including book, magazine and newspaper publishing, online media, mobile and free to air television including digital and interactive formats.  For the past four years Kim has been Director of Strategy and Technology at the Nine Network, where she was responsible for the strategic and wireless development of existing and new television formats, including viewer engagement strategies using wireless and premium services, and the first fully interactive sporting applications on digital television.  Prior to this Kim was Director of Business Development for PBL where she was seconded to ninemsn to develop and implement strategies for both the marketing and content divisions - of what is now Australia's most popular and profitable web portal. 

In 1995 Kim returned from the US where she was VP and Publishing Director of Harper Collins Interactive, part of the News Corp Group, based in New York.  She was instrumental in establishing the Advanced Media Group, set up to integrate and work with the other News Corp companies in order to develop a new media strategy.

Originally based in Sydney as Non-fiction Publisher for HarperCollins, Kim has worked for a variety of book publisher and Newspaper proprietor, including John Fairfax and Sons, Prentice Hall, Grolier and Kevin Weldon and Associates. 

Kim has also lectured part time in Publishing at Macquarie University and has written for major newspapers and magazines.  She is a member of the Expert Advisory Committee (Humanities) for the ARC and a member of the University of Sydney Senate.

Kim's comments from the seminar

I have three areas that I want to reflect on in my session. The first is the comment that DRM will not solve piracy. I don't think that can be stated so simply.  I think DRM actually can solve some piracy issues. In particular, when you look at piracy on a mass scale.  At what point does scale dictate the need for a DRM strategy.  I think that is why we are talking about DRM today; at what point can you no longer sustain piracy as part of your business model?

In order to look at that you need to respond to consumer behaviour. Consumer behaviour is definitely changing, and we need to change with it. The differences are that: users want more and more; they want flexibility; and they want portability. We haven't seen anything as dramatic in the video industry as we have seen in the music industry where consumers want to access their music not only from their record player or their CD player, but from their PC, their iPod and on  their phone, etc.

So we have to deal with the portability issue; but we also have to deal with flexibility in the music business model as well.  People don't want to buy whole albums ;they want to be able to buy sinlge tracks or small samples of music.  What we are seeing in the music industry is the development towards a micro payment system.  It is a long way from being perfect but it doesn't seem inconceivable right now to pay for single records or single tracks on music albums.

The question we can't answer is how much will consumers pay for that kind of portability?  If we look at what the distributors and the middlemen are doing with music, they're trying to do the opposite of what the consumer is doing. They're trying to restrict portability and restrict flexibility, not to a level where they can't offer it to you, but to a level where it can be tracked. That is the issue we need to solve in digital rights management at this point in time: what systems can we implement right now that will enable us to track consumer behaviour that enables them to have flexibility and portability, and enables the supplier to be paid?

Restricting portability and flexibility is a defensive mechanism while the industry works out how to derive revnue and  protect its windows, territories, and all sorts of ancillary rights that go with content. So we have this almost complete conflict between what consumers want and what the current systems can offer them in terms of flexibility and portability. The difference, I think, can be summed up as follows: what is it that I want to buy as a consumer and what is it that   a content distributor or a content makerwants to sell? (I agree with Chris Atkins in his differences there).  At the moment the answer to those two questions or points  of view are fundamentally miles apart, and that is because we don't have tracking systems and rights systems that enable us to distinguish usage in portable or flexible formats. That is something we need to address and we need to address it very quickly.

Unlike Chris, I am not sure we are seeing a move toward a distinct amount of video content being consumed in small bites, like we see in the music industry. The question is: does that buy us a bit more time? I suspect it does.  How much time, I am not sure. I think some devices enable content in smaller bites; mobiles, iPods with screens, the new mobile phones with bigger screens etc, but I do not see a consumer demand or viewers saying, I want to see dramas in three minute segments. I do not see  a consumer problem that we need to solve. But I would be happy to hear from other people if they are seeing a greater demand for those sorts of pieces of content.

So, talking about the broad industry, how willing are we as digital content providers to come together and solve these issues? Not within individual industries, not by negotiating contracts within the studio industry or within the television industry, but actually across industries?  How willing are we to sit down with the telcos and look at the issue Chris Atkins raised about the middleman who is getting squeezed out because the consumer is going directly to the original provider?  How willing are we to work with each other on standards and systems that will track usage of content that may end up starting off in my device or one area and travelling across many?

For example, the music industry is now cutting across telephony, it is now very much part of the  computer industry, the computer software   industry and the consumer electronics industry.  These are all industries that have traditionally been distinct and had their own middlemen or women. Now we are looking at perhaps one middleman across all of those, and that is another issue that we have to take into account. It is not efficient or useful for the broadcasting industry to develop a unique form of digital rights management for broadcast without it being compatible with other methods of digital rights management, for example, across the Internet or across telephony.

We also have to think more clearly about margins . What we are starting to see is that, with an increased level of distribution channels, we are not seeing more players, but fewer players. That is something that we probably haven't spent a lot of time looking at. For example, if Sony in the USA decided that it wanted to make its music content and its video content available directly to consumers, it wouldn't take much for them to do aggregation deals with the telcos and then feed it through the Playstation 3 or 4.  At the last count there were something like 40 or 50 million Playstations in the US market. So they have a ready-made market straight to the consumer and they can bypass the middleman. This demonstrates Chris' point  on margins, but it also means that there are fewer players in the marketplace and more and more, creators of content have to go through fewer channels.

In that scenario, I think there are some good things to come out of that.  What that does quite often is drive content makers underground until they can come up with new models. What you breed is smaller, more flexible companies with less overheads who can, in some ways, mimic those models on a very small scale.

In summary I believe weneed to address the divide between consumer desire, and cosumer offering ie. what it is we are buying versus what it is we are selling; and how we close the gap, not just as a siloed content industry, but as a broader digital content industry. We need to  understand how we make sure we talk to each other in terms of tracking systems, micro-payment systems to ensure we can offer consumers flexibility and portability. If we do not then we will not address piracy adequately enough to prevent it building to mass scale.

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