Australia

“Australia is Way Behind in the Broadband Stakes”

What e-content means in Australia:

A: E-content is used in Australia to describe various forms of digital media content. Applications therefore span the traditional media sectors: the use of digital media (for example, special effects in film and television) to applications in other sectors such as education (online learning) and health (digital medical imaging).
What is the current status of e-content in your country, including national e-content development across all the sectors of the industry?

From an industry point of view, the industry is strong, but is emerging from a state of relative decline since 1999-2000 when a confluence of activity surrounded the Sydney Olympics. While statistical indicators are not readily available for this rapidly emerging sector of the Australian economy, Australian Interactive Media Industry Association(AIMIA) presents the following overview: E-content development industry in Australia is a broad industry sector which includes web developers, data casters and streamers, electronic publishers, interactive TV(iTV) producers, software developers, advertising agencies, web-based services, e-learning, and games developers. All of these use a range of interactive tools and functions to create and bring new digital and interactive content products as well as other services to the market.

On the basis of its membership and industry knowledge, AIMIA estimates there are approximately 3,500 companies operating in the e-content sector in Australia. Most are Small to Medium Enterprises (SMEs) with a few larger corporations. While they are a fundamental part of the increasingly important copyright/intellectual property industry and also cross over to the ICT industry, generally, AIMIA has no way of estimating their economic contribution to GDP.

In ‘The Economic Contribution of Australia’s Copyright Industries’, The Allen Consulting Group specifically highlights the following:

In 1999-2000 Australia’s copyright industries contributed $19.2 billion in industry gross domestic product (IGP), which was up from $15.6 billion in 1996-97, thus representing an average annual growth rate of 5.7%. With a growth rate of 5.7%, Australia’s copyright industries are one of the fastest-growing sectors of the Australian economy. The growth experienced by the copyright industries has exceeded the average annual growth rate of the economy as a whole (4.85%).
In terms of adding value, this represented 3.3% of Australia’s Gross Domestic Product (GDP).
While the value of copyright has traditionally been seen in cultural and social terms, the rise of the information economy and the services sector is changing this traditional perception, so that copyright is increasingly being seen as being part of the core infrastructure, underpinning a number of Australian industries.

Despite this change in attitude, there has been little analysis of the economic value and importance of Australia’s copyright industries as a whole. It should be noted that this report does not include interactive games, iTV, wireless or other elements of the interactive media industry, so these figures appear conservative. Nor do the figures from reports generally touch on a significant difference between the digital content industries and the traditional creative industries. Digital technology has ‘democratized’ the creative industries and opened up the possibility of everyone (with access to a computer) to be their own creator. Professional interactive media developers are being constantly challenged to provide new products and services to enable non-professionals to create their own ‘products’, all of which stimulate the content industries.

It should also be noted from this report that Australia continues to be a net importer of copyright/ content; with imports significantly higher than exports, and that this has important social, economic and cultural implications.

Which e-content area is best developed in your country?

E-entertainment in Australia is strong, especially the electronic games industry which now generates more revenue for Australia than the more high-profile Australian film industry. Highly advanced digital effects for film, television and online advertising which rest on Australia’s already internationally competitive media, communications and entertainment sectors have contributed to the growing success of the Australian games industry.

The Games Developers Association of Australia (GDAA) point to the increasing importance to the economy of Australian games developers. With their unique combination of intelligence, creativity and online delivery, digital games are likely to transform the education and entertainment industries. Based on the technology and skills of interactive media practitioners, electronic games offer an enormous potential for export. In 2002, the export sales of Australian-developed games were worth an estimated A$100 million. With the right support and investment, this could allow Australia to move beyond existing United States of America (USA) export models (predominantly PC and console-based) and focus on other areas such as the Asian and European markets, and on products and services associated with convergence technologies (i.e. wireless devices, IP telephony, traditional media, always-on technologies).

Which sectors in your country are the leaders in e-content development?

The Government is a leading user of e-content and Australia has ranked in the top five countries globally in terms of e-government, Defence, Education, Health, and General Administration. Additionally, the two national public sector TV and Radio broadcasters: ABC and SBS are recognized for their leadership in e-content.

Also the major private sector broadcasters and publishers are the largest and most innovative online media producers, notably:

» NineMSN: the joint venture between Microsoft and Australia’s leading commercial television network Channel Nine
» F2: the online publishing network of newspapers and magazines Fairfax Limited
» News Interactive: News Corporation’s interactive media group
» AOL 7: the joint venture between AOL and TV Broadcaster Channel 7

Please describe the progress of e-content development in your country.

From the early days of the CD-ROM explosion in the early 1990’s, the Australian e-content industry moved towards the web and other medium. We are now immersed in the opportunities presented by an increasingly converged market.

The integration of different media formats, more interactive platforms, and the consumer appetite for new services is transforming the digital content industry.

This convergence of IT, communications technology and interactive media has also meant, a change in the professionals who work in this industry.

Originally made up of CD developers and instructional designers, organizations such as AIMIA now represents content creators, iTV, broadband, wireless, console, CD/DVD and Interactive Media developers.

In the early 90’s when CD was still cutting edge, we used to talk about bringing together full-screen video, cutting-edge instructional design, 3D-rendered animation and multi-user role play over broadband networks. Then, it was just wishful thinking. Now, we see all these elements come together; in some cases in a single product.

The future we talked about has arrived and no doubt, will also seem commonplace in a year or two. So, where do we head now, as we embark into the future of e-content? We know that there will be a change with new ideas, new models and new ways of doing business for the industry in Australia as well as for AIMIA: the industry’s association.

We’ll also see the pervasiveness of convergence, across the areas in which we work and operate our daily lives, and also across new industries, supported by the trend towards digitization, the promise of multi-channel broadcasting and the spread of broadband. It will bring together a diverse group of interactive media professionals from film, TV, print, music and games, to wireless, broadband and other channels.

Songwriters, artists, and authors will merge with web developers, iTV producers, animators and games developers. Interactive media makes up the fabric of our daily lives in Australia and presents promises offered by a digital, networked future.

Please list the major initiatives which have influenced and spurred the development of e-content in your country.

Creative Nation(1994): which is a national cultural industries package of federal initiatives including funding for commissioned works, new media-related venture capital, and education and training.

Backing Australia’s Ability(2001): which is a national Science and Innovation-based package of initiatives, that includes funding for systemic science and technology research infrastructure. This includes initiatives relating to e-science.

What have been the major bottlenecks in the development of e-content in your country?

Relatively low broadband uptake and penetration is widely regarded as a bottleneck for the development of media-rich e-content. We believe that the success of our industry depends on broadband being ubiquitous as a reliable, cost-effective supply service, and on demand from a majority of business and households. This means AIMIA will continue to push for investment by government and industry for the development of e-content for broadband uptake.

Information from Asia and Europe suggests that Australia is way behind in the broadband stakes. A study on broadband usage in Europe conducted in late 2002 indicated that Sweden (13.8%) and Denmark (13.2%) lead the continent for high-speed Internet connections by households. Eight countries were surveyed with Italy and the UK coming last at 0.9% and 2.3% respectively. In the middle, are Norway (5.1%), Spain (6.1%), France (6.4%) and Germany (7.8%). High-speed internet access now accounts for 40% of home connections in Hong Kong (800 000 at home broadband users) and it is predicted that by the end of the year more users from Hong Kong will access the Internet via high speed services than by regular dial-up. In Korea, where the government has strongly supported the rollout of broadband, the take-up and use figures are even higher.

In contrast, Australia’s uptake was at about 3% (and that was a fairly optimistic view). Many businesses and most households in Australia are still completely confused about the availability, benefits and costs of broadband services.

Assuming that there is a connection between broadband uptake and the success of the industry in the future, a major question for Australia is whether the roll-out of broadband should be on the basis of a push (from the service providers) or a pull (from the users) or both.

According to some, the push from the broadband service providers is not enough on its own. Figures quoted (Telecom, November 2001) indicate that the $50 billion spent in the US by the cable industries to upgrade their networks for broadband was not followed by an instant take-up of the service. In June 2002, only about 5.5 million cable modem subscribers out of a possible 65 million homes had taken advantage of the service and the relatively good deals that were being offered.

In Australia, where government policy has meant that free-to-air broadcasters are protected from Internet competition until 2005, the push to broadband has been less than spectacular.

But, what about the pull factor? What would make the majority of businesses and homes in Australia (and critical mass demands both domestic and commercial broadband adoption) take the plunge and connect to cable or ADSL or satellite (depending where one is and what’s available)?

The content industries suggest that investment in and production of educational programs and materials would make a difference. And the film, music and television industries all seem to think that some investment in production in their sectors would result in content that would attract subscribers prepared to pay for education and entertainment as they do in other contexts.

Outside the content industries, there is less optimism with some commentators predicting that it will be the longer term development of user-friendly applications that will attract people to broadband. In conclusion, it seems likely that the combination of a small population and a risk-averse political and commercial culture in Australia will mean that we will not be leading players in the interactive media stakes. But we don’t have to completely miss the race.

It is still possible for the industry players to come together to encourage the take-up of high-speed Internet access. Significant movement at the demand end may well be the catalyst that government and the carriers need to make the supply side accessible and affordable.

‘Australia’s Broadband Connectivity: The Broadband Advisory Group’s Report to Government’ is available at: http://www.noie.gov.au/publications/NOIE/BAG/report/ index.htm

In developed countries ICT has become part of daily life and e-content development is primarily left to the initiatives of individuals or organizations. On the other hand, in less developed countries, the development of e-content is largely dependent on ICT infrastructure. Please give a detailed analysis of the situation in your country.

Australia is a well-developed sophisticated technology economy. E-content development is largely in the hands of individuals, organizations and governments. A wide range of ICT infrastructure providers (telecommunications companies, ISPs, web hosting companies, managed service providers) offer services and facilitate content development of ‘principal’ e-content authors who include individuals, companies and governments.

‘The Commonwealth Government, working in partnership with the state, territory and local Governments and the private sector, should commit to achieving the national goal of making Australia a world leader in the effective use of broadband technology. The achievement of this goal will ensure that Australia remains at the forefront of the global economy and that all Australians will thrive in a more connected community,’ says the Report (which addresses the issues of broadband infrastructure, availability and affordability) by the Broadband Advisory Group (BAG) to Government.

The Report makes 19 recommendations, which, if quickly implemented, would indeed have Australia at the forefront of the global economy and not assessed as 18th in terms of broadband uptake, as a recent OECD report indicates. From the developer perspective, the most interesting recommendations relate to how government might promote broadband content, applications and awareness.

In particular, the Report recommends that government give high priority to stimulating the digital content industries in Australia by supporting research and development in the application and design of interactive broadband technologies and content. In simply terms, this means money invested in digital content and applications. For content, it could be by direct project funding or by the establishment of a Digital Content Finance Corporation. Neither idea is radical: both models already exist in the film industry along with a range of tax incentives to encourage investment.

Why not apply this in the area of digital content?

The Report also recommends that the Government work with stakeholders to develop an effective digital rights management (DRM) regime. The report recognizes that appropriate digital rights management systems will result in greater access to content and promote a major drive for increased broadband adoption. They note that early adoption of global interoperable rights management standards by Australian content production and distribution industries would make Australian content more competitive in overseas markets.

Now here, there could be a radical departure from the Australian government’s benign but basically hands-off approach. What if the government took the initiative to designate a particular DRM system for all government-associated digital content in the areas of education, health and government services? What if the Australian government led the way with interoperable rights management standards for Australian content production and distribution industries as they create and trade digital content and assets? This would provide the certainty that developers feel is currently lacking and which many say is their reason for not investing in more sophisticated and ultimately more efficient digital rights management systems.

If this was combined, as also recommended by BAG, with a more flexible approach to government-owned intellectual property, a huge range of Crown copyright content could be made available for commercialization. As the Report points out, this would enable developers to repurpose copyright materials for domestic and international markets. It is a smart use of materials, already funded by the Government, but made available as an Australian asset.

The final recommendation in this section of the Report deals with improving access to international distribution channels for Australia’s digital content industries. The Report refers particularly to the huge potential markets for interactive games, which are no longer just console based or CD or DVD platform specific. Wireless and broadband offer new opportunities for Australian games developers who would benefit from the Government regarding digital content and games as an international trade priority.

Resorting to clichés, the future of Australian broadband is ‘in the BAG’. We should ‘Just Do It’!

How do you see the future of e-content development in your country?

Australia enjoys excellent levels of technology adoption and acceptance, computer literacy, computer penetration and telecommunications infrastructure (with the challenge of expanded Broadband access being presently addressed).

The total income of specialist businesses in the Australian ICT industry reached just over $80 billion in 2000-01, having increased by around 13% per annum since 1992-93. There were around 25,200 businesses operating in the Australian ICT Industry in 2001. No less than 73% were information services businesses, the number of which has increased by around 18% per annum since 1993. [Source ABS / ACS: 2003] The ICT industry is dominated by small businesses. In 2001, almost 96% of all specialist ICT businesses operating in Australia employed less than 20 people.

AIMIA has identified Policy Priorities for the industry in Australia and operates a series of Virtual Taskforces on issues for the interactive media industry. These Taskforces assist AIMIA with:

» Providing insight and intelligence into particular sectors;
» Monitoring the impact of particular sectors on the industry as a whole;
» Providing networking and information exchange opportunities;
» Lobbying Government;
» Representing members’ views to State, Federal and overseas interests;
» Developing submissions to State and Federal Government;
» Responding to requests for information or public comment.
The Taskforces are generally aligned to the ‘key issues’ which the National Executive of AIMIA identifies. In 2003, these were:
» Accessibility;
» Privacy;
» Broadband and Bandwidth;
» Digital Content, Copyright and Rights Management (DRM);
» e-Learning;
» Interactive Entertainment;
» iTV;
» Mobile and Wireless.

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