Jan McConchie

DlSTant Horizons

Multimedia Forums Program; Multimedia Forum 3 - Export and Investment, Adelaide Convention Centre, I July 1995

The third Department of Industry, Science and Technology forum (DIST) was held in Adelaide on I July 1995 - the day before the opening of the second Australasian Multimedia Industry Association (AIMIA) Conference. It cost S250 to attend the highly subsidised event, and one wondered how many "private industry" dollars were spent; a who's who of government agencies filled the Adelaide Convention Centre, apparently another case of government dollars being recirculated around relevant departments.

Nonetheless, as I return to my notes after a break from multimedia forums and conferences, my judgement of this event is kinder than I had expected. At least this forum aimed to pitch market information beyond the "I've got an idea for a multimedia title" level. It focused on bringing expert speakers to discuss market potential and pitfalls and development finance options. This included introductions from DIST, Market Australia and Austrade representatives outlining Federal assistance programs.

Underpinning the program was the release of the Coopers and Lybrand study "Excellence in Content: the focus for Australian investment in Multimedia content". I assume this is freely available, as it was financed by DIST, Market Australia and the Department of Communication and the Arts. The report is primarily a policy document and I will therefore leave detailed examination for later; however, it is interesting to note that when John Montgomery from Coopers and Lybrand spoke to the report there was a very clear undertone of "woe betide the industry" if government agencies continue in their currently disjointed and competitive fashion. One can only hope that the audience of government officials took note. The second issue relating to the report was quality of content. It is titled "Excellence in Content" specifically to emphasise Coopers and Lybrand's conclusion that "Australia has a significant opportunity to position itself for the future - and the future for Australia is in excellence in content". Those of us who tried to get the designers of the Co-operative Multimedia Centre (CMC) proposal to include content and creative R&D in the bids, with little response, must surely find expensive consultants' reports reiterating the same thing - after the event - somewhat frustrating to say the least.

It is my observation that when marketers, financiers, government officials and even industry members emphasise the importance of excellent content, they think the mere mention will effect it. But at least here we could listen to Chris Nash from the ABC-TV's Hot Chips program give his perspective on what is happening in cultural terms. Excellence will only come when we acknowledge that we are involved in the evolution of new media, rather than media which merely represent the old in an innovative way - it is only through such recognition that true long-term opportunities will open for this industry.

What every business person wants to know is what is going to sell to whom; when; and how does one make a buck out of it? Currently, there is such a massive spread of sectors and ways of working in each that a clear picture is a long way off especially as consumers are buying in a very ad hoc fashion. For example, figures indicating that 48 percent of purchases are now at point of sale generate little confidence in financiers, since simply looking at the cover gives very little indication whether a product will be satisfactory. This is a fairly random exercise. And with figures indicating that 40 percent of those who purchased the Lion King CD-Rom one of the top Christmas sellers in the U.S. - returned them in January, there is not much hope for those who try to predict the market using current sales. Bundle sales add that final random element to market predictions. Once customers have been burnt and bored a few times they will start to look for advice. More mainstream magazines will have reviews; kids will talk face-to face or across the 'net, and purchase patterns will change quickly. Three speakers addressed the issue of distribution and marketing.

Catherine Winchester of Wunderlust New York was the most interesting. She was very up-front about the deals she was making with distributors. What was most interesting was that even though she is an experienced multimedia producer with a very clearly defined market niche, she has chosen to make a hefty investment in purchasing copyright for the Pink Panther cartoon character to identify her product. She is attempting to overcome or cash in on that irrational point of purchase market. Her product is very carefully targeted; the niche is real-world adventure game - her products have game play addictive qualities, are "intelligent, fun, have integrity," and are in five languages for the global audience. No hit-and-miss here, no place for one passionate idea.

John Clarke from Lateral Concepts was more guarded about his trade secrets, although it is important to quote some of his figures here for newcomers to the industry:

only 150-200 titles gross over $750,000;
there are over 2,300 CD-ROM publishers in the U.S.;
only one product out of 100 reaches U.S. retail shelves;
96 percent of U.S. title development is unprofitable.

Like Catherine Winchester, John Catlin of Applied Learning works in a very narrow, clearly defined niche market; his is corporate training. He outlined his company's strategy and was visibly happy with its current success. Like Winchester, he has made pragmatic marketing decisions - Applied Learning's market is global and it deliberately avoids mentioning that its product is Australian, because it believes this would limit sales.

Both Catlin and Winchester's business acumen is strong, and they have the advantage of being early entrants to the industry; their road has been rocky but they have determined that strategic (and in Winchester's case expensive) marketing is critical to market success. Neither of the sectors in which they sell could be called dynamic or cutting-edge - a sobering thought.

The following three speakers were from the Federal funding agencies Market Australia, Austrade and DIST. While this is not the place to present their many support programs, it is interesting to quote DlST's Ross James, who grouped Australia with South-East Asian countries. This is particularly relevant because these agencies constantly push export of Australian products to the Asian region. I believe this is inappropriate and narrow-minded in terms of cultural product. Measured against South-East Asian countries: Australia is the fourth-largest economy; is second in the Information Technology market; has the second largest number of publishers. Surely in the short-term at least, focusing on developing a domestic market makes more sense than assuming a profitable Asian export market especially while the intellectual and psychological operations of successful product are still being assessed.

The final session focused on probably the most important issue development finance. The Chief Executive of the Australian Multimedia Enterprise (AME) had not been announced at this time, and the speakers were contained to Gary Schefsky from Euro Wideworld Investments Inc (San Francisco) and Cass O'Connor from Turnbull and Partners. Both speakers, though closely aligned with the multimedia industry, are primarily concerned with profit, and given the high risk in the industry at the moment they offered no easy solutions, but both emphasised tight business plans and market research. Now that the AME is established (Martin Cooper is its chief executive), perhaps bridges which allow time for learning can be built with financiers while the market stabilises.

Debate about content and marketing will inevitably intensify; however, it will be some years before the questions raised in this session will be answered.