IRELAND COULD be set to become a gatekeeper in the media industry’s ongoing war against content piracy.
At least that’s what Minister for Communications Eamon Ryan would have us believe after he unveiled an ambitious plan to establish an international content services centre (ICSC) in Dublin.
Modelled on the International Financial Services Centre (IFSC), the idea is that the ICSC would become a broker between digital content developers and owners and the major content distributors.
Ryan believes such a centre could lead to thousands of new jobs, though there are quite a few hurdles to overcome first.
The proposed ICSC forms a central plank of Ryan’s policy document, Technology Actions to Support the Smart Economy.
The idea was proposed by Neil Leyden, who runs a small company called Calico Media in the Digital Hub in Dublin. Ryan’s adviser Barry McSweeney has bought into Leyden’s vision.
The background to the proposal is the fact that digital content is now a globalised commodity. However, the free flow of content is hobbled by rights issues. For example, when a film- maker or TV programme maker sells distribution rights to a broadcaster, this inhibits the availability of the content on video-on-demand platforms. This “scarcity” at the retail end leads to piracy, and rights holders react by targeting internet service providers.
In Ryan’s view, the issue could be addressed by a centralised, back-office clearing house to help rights holders manage and distribute their content globally.
“This would be in a tax- incentivised, pro-business and flexible regulatory environment matched with the required infrastructure and technological solutions to ensure quality of service in terms of warehousing and distribution,” he said.
“The centre would serve both multinational interests as well as local indigenous players with global scale or ambition.”
Ryan added that as advertising online became increasingly of the rich-media variety, there was also an opportunity to centralise advertising networks’ back-office functions to one territory.
The Minister envisages the IDA approaching content rights- holders and organisations worldwide with a view to them becoming clients of the ICSC.
“With Disney now buying into Hulu.com, the third most watched video content site in the US, there is an opportunity to help roll out this service worldwide, with Ireland being the base for European operations,” said Ryan.
“Other potential customers include music rights organisations, large traditional media content holders like Time Warner or online games providers such as Electronic Arts.”
Just like the IFSC, one of the key draws for the content centre would be tax breaks.
With the right carrot, Ryan believes multinational content holders might “house” their content in Ireland, though this part of the offering has yet to be fleshed out.
Ryan envisages the ICSC being established in 2010 and is setting up a working group of stakeholders to “flesh out” the proposition. The Green Party Minister is evidently excited by the idea but it remains to be seen whether his colleagues, in particular Minister for Finance Brian Lenihan, will be equally enthusiastic.
The changing media landscape is reflected in the new Broadcasting Act, which took more than a year for Ryan to shepherd through the Oireachtas.
The new law increases the fines for possession of an unlicensed television set from €635 to €1,000 for a first offence, and from €1,270 to €2,000 for second and subsequent offences.
Taxing computer owners for watching television on their PC is provided for in the Act, although Ryan signalled this was not on his agenda for the moment.
“While the system will no doubt evolve and the technological developments that occur will lead to change, they are not yet at a stage where it is clear to us how we can make an effective change, given the evolving nature of the situation,” he said. “We will have to change, but not at this time.”
The main innovation regarding the licence fee is that fixed payment penalties have been introduced as an alternative to court proceedings.
Under the new regime, the television licence inspector who uncovers an errant householder can issue two reminder notices to pay up or else.
If after 56 days no payment has been made, the inspector has the option of issuing a fixed payment notice requiring the payment of a fine of one-third of the cost of the television licence. If the fine is paid and a licence purchased, no prosecution will ensue.
The measure is intended to stop clogging up the courts with television licence cases. Scores of people are jailed every year for non-payment of the licence and subsequent court fine.
However, with the fine having been raised at a time when unemployment is soaring, it seems inevitable that prisons will continue to be filled with people prepared to do time rather than buy a licence.
This is an article I wrote which has been published in the latest issue of Film Ireland.
One thing is for certain. The television is going nowhere any time soon. As a screen to watch stories unfold – be they live action or animated in form – the television is and will remain the hearth of the home. However, how we interact with that screen and how we receive content over it is changing at a rapid pace. In order to understand these changes, there are three key areas that we need to look at: 1) The technology now underpinning television 2) the audience watching it and 3) the business models funding it.
Firstly, understanding the change in technology is perhaps the most crucial aspect. Many in the broadcasting sector have mistakenly viewed the evolution towards digital as simply a switchover from the analogue signal to a digital one (with the EU pressuring nation states to facilitate the switch-over by 2012). However, this belies the underlying reality of the situation. The technology platform – which was once the humble cathode ray tube television set – is rapidly becoming a much more complicated piece of kit. Now it is a flat, high definition screen with the ability to receive a digital signal, either through a built in tuner or with the help of a set-top box or games console. Added to this are increasingly new functions such as personal video recording capability (PVR), USB ports to attach peripherals and more importantly, broadband connectivity. Quite simply, the television is no longer a television in the strictest sense. It is a broadband-enabled computer with a lovely wide screen. Picking up a digitally broadcasted television signal is just one of the many functions it can do much like the way voice communication is now just one of the many functions on a mobile phone.
The second significant change is the audience profile. In an IBM report - entitled, tellingly, “The End of Television As We Know It” (2006)- they divided the new audiences into three unsubtle but distinct categories: the Massive Passives, the Gadgetiers and the Kool Kids. If you find yourself being drawn to the television to watch the news when you hear the Angelus bells, you are most likely among the “Massive Passive” audience (age 35 years and up). This is the generation who grew up with the television screen and the accompanying broadcasting schedule as the centrepiece of their living room and evening entertainment.
The Gadgetiers (age 25 – 34 years) are those digital natives who have grown up with email and internet access as a central feature in their lives and have a much more “lean forward’, interactive relationship with the screens that they view content over. The Kool Kids (25 and below) are a younger, more technologically sophisticated audience capable of multi-tasking across a series of screens – mobile phone, notebook and television. In fact , they differentiate very little between screens, seeing them merely as windows for consumption the consumption of content. This is either through ‘grazing” (digesting 3-5 minutes worth of content at a time) or “feasting” where they schedule large swathes of downloaded content for themselves.
IBM points out – and this is verified again by PriceWaterHouse Cooper’s latest Global Entertainment and Media Outlook 2008 -2012 report - that there is a distinct “generational chasm” opening between the digital migrants (or Massive Passives) and the Digital Natives. Those working in the entertainment business for the next five to seven years will need to cater for the more conservative tastes of the latter audience (business as usual) while still providing for the increasing demands and more progressive tastes of the Gadgetiers and Kool Kids.
Finally, the most challenging change is in regards to the business model underpinning content creation. The increasing fragmentation of the television audience through digital channels, reduced audience shares and aggressive competition for eyeballs from other devices such as games consoles and internet-enabled devices has meant that the traditional sources of funding for content creation are under huge pressure. Added to that is the movement of advertising spend away from traditional platforms such as television, radio and print to the markedly more measurable internet platform. This is all having and will continue to have a devastating effect on budgets for independent content creators. However, the “silver lining“ perhaps is that it has never been so easy to connect with an audience thanks to the increasingly ubiquitous distribution platform of the internet. (661 million broadband enabled households by 2012, according to PWC). While a viable and sustainable revenue model is still to emerge, logic would dictate that content creators and advertisers should be able to find a happy middle ground to continue entertaining their respective audiences, potentially at the expense of the increasingly redundant middle-men i.e. the broadcasters.
In terms of Ireland’s position in all of this, we traditionally have had quite an inward-looking unimpressive broadcast sector. With the exception of animation, our film and television content rarely travels which is disappointing considering we are an English-language speaking territory. However, as a country where we have excelled is in the area of financial services, technology and software. In a recent article for Enterprise Ireland’s Technology Ireland magazine, I argued that we could conceivably take advantage of the opportunity that is emerging in terms of the convergence of media and the new demands that it is having on the old traditional media structures. The same opportunity existed in the 1980’s in regards to financial services and the Irish government was canny enough to facilitate the establishment of an International Financial Services Centre. The opportunity for an International Content Services Centre is ripe – a clearing house and legal services hub for global content – the new currency of the 21st century. This could be the middle ground between content creators and their audience, facilitating the transactions and rights clearances necessary to cater for the increasing global demand for content. It is a big idea. But then again so was the IFSC.