Julie Fox visited MILIA 2001 and reports on the shifting sands of the Internet animation economy.
The beginning of the end? That was the question...
"The end of the beginning" was the proposition put forward by Gerd Leonhard of Sony Digital Pictures Entertainment, one of the most heartening speakers at MILIA's conference, "How will interactive content pay?" At Alphanim Digital monetising content is our main aim these days and our presence for the first time with a stand at MILIA 2001 was a nod to the above and a, "Yes, in spite of everything." As the sister company of Alphanim, a very successful television animation production company, the pre-market prospecting for Alphanim Digital brought with it more "how's" and "when's" than ever before, especially in the wake of the fates befalling very many of our biggest and best competitors in the gone.coms marketplace of recent months.
Alphanim Digital today counts at its studio in Angouleme in the southwest of France almost 20 Flash animators producing content essentially for the Webcasting window -- VerysmallTV -- of our teens-young adults portal www.YAFOULE.COM. At the Paris headquarters, another 30 something bunch of mainly 20 somethings run the editorial sections of the "happenings" cultural magazine, supervise the chat platforms and organise the special events linked to promoting the community Website throughout Paris and France. Who's paying? We are. "Who's going to pay?" you ask? Next question.
A Different Kind of Market MILIA brought its reality checks. Veterans of the TV markets such as NATPE, MIP TV and MIPCOM, we were aliens from another planet on the Croisette in Cannes in the month of February. Some preconceived ideas died quick deaths. MILIA = all creative types = cool compared to TV markets: WRONG! MILIA 2001's share of business suits with business plans was higher than ever before, resembling from a distance an unusually male oriented TV market, where, comparatively, we knew no-one in the corridors or in the lunch line. The creative types in business suits had high price tags on their content as well. In a year where anyone who made it to MILIA was primarily concerned with letting people know they'd still be there next year, we felt lucky to have encountered the cold winds of the TV market place for some years before arriving in this place at this time.
There's Still Opportunity
We expected many TV animation producers to be present paying their respects to the holy grail of convergence. We were one of the few. But our "old media" TV clients sent their "new media" people to us. Not rich, but not empty-handed. Scandinavian, French and German buyers were looking for added value by bringing products and not just programming to their channels. Some were looking for interactive content to parallel TV series they were acquiring, others were looking for "indie" animation to drive traffic to their sites. All were interested by the possibility of multi-platform Flash-based animation production capable of reducing traditional animation production budgets by up to one third. Particularly interested was Tigi, the newest arrival in France's Canal J family and catering entirely to the very neglected area of pre-schoolers. Alphanim Digital is currently discussing Tigi's first commission of a pre-school series in Flash. Some German broadcasters seem certain to follow this road shortly as well.
But right now in France we're in an ADSL-less land right now so the format has to be short! However, despite these restrictions and the limitations of video streaming and the sophistication of animation, we saw at MILIA that Alphanim Digital delivers outstanding content.
What MILIA also confirmed was the increased stirring from public broadcasters world-wide indicating that the era of "politically correct" content is teetering toward the end of its shelf life. Certain programmes once created specifically for the Net will find their place on TV in the not so distant future. Our own experience of this at Alphanim Digital has been with a series called Shorts of Steel, initially produced for Verysmalltv on yafoule.com. Now we have a Canadian co-producer on board to produce the television series. This very recent event has been the motor for us, as with many other Net producers, to revise our in-house production processes and produce Web-based properties in broadcast quality format in order to maximise multi-platform exploitations.
New media markets especially active at MILIA included Germany, Spain and Italy based portals acquiring content and discussing co-production opportunities. The over-riding feeling being that, as with TV co-productions, sourcing finance for Internet co-productions will require increased imagination, with smaller but more diverse and numerous revenue streams than initially expected.
Opportunities not available in the audio-visual sector reared their heads during the market in territories such as Japan where it can take years to establish an international co-production for television. Today -- due to a lack of Japan-based Flash animation artists -- an increased interest in international co-productions for the Internet has become apparent and, while we did not sign deals there, the doorways have opened.
Marketplace Trends
Whether it was syndicators such as Line Up, rights holders such as book publishing companies, Vivendi/Universal, Sony Pictures Digital Entertainment, or research organisations such as Forrester who hosted several of the conferences, the outlook was that people will pay for quality content in the future. (A representative of Bertelesmann repeatedly pleaded for understanding of his, "No comment," reply to almost all questions fielded to him at the conference held one day before the Napster decision was taken in L.A.)
Whether quality content meant tools to manipulate content, added value personalised content selection or merchandising, the concept differed from one sales person and buyer to the next.
Payment concepts and business models also differed -- some seeing the way through aggregating micro-payments from diverse streams of small revenues, others viewing content as a utility and not something to be paid for "every time you turn on the faucet," as Gerd Leonhard explained.
Who will pay? At MILIA conferences it was suggested that advertising revenue would continue to make up two-thirds of all revenue once critical mass is reached on a site. Other business models discussed were to be supported to the extent of 10% by ads, the rest split evenly between subscribers and direct sales.
All agreed however that the first and most important factor is that content has to be worth paying for and that demand based models will force business models to evolve.
Finding A Way
More reality checks for both distributors and content producers came however in the weeks which followed MILIA as, in line with the troubled tech sectors of world stock markets, prices came tumbling to fit demand. Properties offered to us at MILIA were later re-offered at one-third of the S.M.P. (Suggested MILIA Price).
MILIA participants are still finding their way. But they were there and we were there. We hope that those who have inspired us along the way will be there in 2002. That we'll even see them in the corridors at NATPE, MIP TV and MIPCOM.
And as they say in France -- against all recommendations of the Academie de la langue francaise -- "Vive le Net!!"
Julie Fox is director of the international distribution entity of Alphanim, one of France's most successful animation producers. Overseeing worldwide sales for TV, video and merchandising, Julie is also responsible for distribution of on-line content originating from Alphanim's Flash animation studio at sister company Alphanim Digital. Prior to joining Alphanim, Julie headed up international sales and acquisitions at Dargaud-Marina over a period of 5 years and started in the kids' business in another life as a grade-school teacher!
