3. Conclusions
The theme Multimedia production companies after the hype was selected by Electronic Media Reporting on the basis of a survey being prepared for the fall and on the summary of a Finnish industry survey. As The Netherlands and Finland are close in many respects, among others, the advancement in multimedia, the meeting would be used to sound out the mood in The Netherlands.
A summary of the Finnish industry survey was distributed to the members of the forum before the meeting (see addendum I).
From the discussion it became clear that:
- Most of the companies represented had taken a step back in the last years;
- Clients have become more educated;
- Companies have decreased their research efforts and new technology developments;
- Companies work more efficiently;
- Companies concentrate on their strengths and subcontract non-core assignments;
- Companies that had ploughed back the earned money into their company were still around.
- Companies do not look to the government for help;
- Scepsis about involvement in European Commission projects;
- VAT rules should be changed with regard to CD-ROM and blank media for producers
- Winning awards is an assurance for clients and an asset for marketing, but not a revenue generator.
Ad 1. Recession
Most of the companies had taken a step back in the last year or even earlier. Scaling down ambitions were the motive. Saving on the employee costs by not renewing freelance contracts was usually the method. The smaller number of assignments led to more competition and less innovation.
Ad 2. More educated
Clients have become more educated since the start of Internet. For a company the luxury to have a website has passed. A website is now an integrated part of the communication and/or commerce mix and needs to yield leads or revenues. Clients are able to specify their needs now and will not leave a free hand to the production companies. They become a partner in the development of the specifications, treatment of content, time schedules and building process.
Ad 3. Decrease
Production companies have decreased their research efforts and new technology developments. A rationalisation has taken place in companies to work more methodically. This means usage of earlier development tools and solutions instead of developing a new method. As such the production companies have pushed back the percentage of innovation to less than 25 percent. One producer formulated innovation in his company: In the beginning everything was research. We had never had a client, we had never had an assignment, and we had never had a time schedule. Over the years we got good at most of the parts, including planning deadlines. We are still investing in new media technology, but the steps are smaller.
Ad 4. More efficient
Companies have started to work more efficiently. Every project is a new project, but not every project needs new technology. Existing software is used or adapted; custom made software is used less. Standard modules are sought after. Especially in the field of content, the use of existing or self developed content management systems (CMS) has become regular, providing companies with the opportunities to perform cross-media publishing through more delivery channels.
Ad 5: Concentration on strengths
Since the dot.com blow-out companies have started to concentrate on what they are good at and subs-contract non-core work. This indicates that companies are less eager to pick up assignments involving for example printing brochures. It also meant that they do not have an urge to expand abroad. In fact in most cases subsidiaries abroad were either reduced to a symbolic presence or completely closed. Where needed agreements were made with local players.
Ad 6: more careful investment
From the discussion it became clear that the companies that had ploughed back the earned money into their company were still around. The dependence on venture capitalists had shown especially in the consumer companies.
Ad 7: no help from the government
It was remarkable that the companies were not looking for help from the government. The Digital University is a government funded project, but it work under normal market conditions and rules of competition. The companies do not expect the government to come out with special project to support the multimedia companies. In fact there are enough assignments for e-government sites (ministries, parliament, provinces, municipalities and governmental institutes) and sites for the educational network Kennisnet. A major project is Kenniswijk, which has been set-up for broadband experimentation.
Ad 8: Scepsis on EU projects
Asked for comments on participating in EU projects the participants were sceptical. Two of the participants had experience with EU projects. They experienced the rewarding of a contract as a benefit as it freed up money for experimentation, but all the paperwork involved was seen as a handicap.
Ad 9: VAT
VAT on CD-ROMs and other media were seen as a bone of contention. For a newspaper or a book 6 percent is charged, while for written or blank CD media 18 percent had to be paid.
Ad 10: Winning awards
Asked for the benefits of competing in multimedia competitions, the participants said that they partook in order to measure themselves and get exposure. When they were nominated or winning a prize they saw this as an assurance for their clients and an asset for their marketing campaigns. It definitely did not bring them extra assignments or money.
The overall impression of the panel was that the economic depression has hit the Dutch multimedia industry hard. Companies have retreated from their flamboyant lifestyle and returned to core business and bare essentials. While in the economic upswing every project was a new challenge calling for new solutions, now the companies go back to their completed projects and use parts from these projects. So there is less risk-taking and more efficiency.
As to the marketing side, it is clear that there is less money for marketing and that new assignments are mainly sought in the circle of existing clients.
