Friday, February 27, 2009

The Coming Crisis of the Creative Class: Charles Leadbeater on Digital Britain

Would a book on Australian media seem odd if it made no reference to News Corporation, Australia's most globally significant media company?

I mention this because of a recently conversation with Graham Meikle from Stirling University, where he pointed out that a recent collection of essays on The Media in Scotland made no reference to Scotland's most globally significant media company. That company is the Edinburgh-based Rockstar Games, the people behind the wildly successful Grand Theft Auto series.

This continuing aversion to thinking of new media as part of The Media (films, newspapers, TV networks etc. - the 20th century mass media) comes at some cost. Charles Leadbeater indicates this in his recent critique of the Digital Britain policy document released by the UK Government.

According to Leadbeater, Digital Britain works off the premise that wider access to faster broadband will boost demand for the products of Britain's established media and creative industries. But what we know about what people do with faster broadband suggests that this is far from the case - it may in fact accelerate the decline of 20th century Big Media, as more and more people adopt a more do-it-yourself to the media tools and materials available to them.

Far from being a win-win policy, the push to accelerate the spread of the web
through broadband puts political leaders in a painful bind they are keen to overlook.

They want to tell us about a brave new future full of opportunity that broadband will open up. Yet the investment in broadband will only make sense if more consumers use the web to access, create and share media content and services in new ways, exploiting the web’s capacity for interactivity and collaboration.

If more people do that, more intensively, however, it will just accelerate the painful disruption of established media and cultural industries – newspapers, film, television, music recording, books – which rely on a mass market advertising, physical distribution and copyright protection. The incumbents in these industries were already fearful that the web was eating away at their business models. The steep decline in advertising revenues brought on by the recession has only made things more perilous, especially for the weakest players such as Channel 4 and those dependent entirely on advertising revenue such as ITV. Most commercial old media groups are in the midst of painful redundancy programmes. The remaining staff will be asked to do much more with and for less.

Accelerating the spread of broadband will not save these industries but make their
predicaments more difficult. Here’s the truth: plans to invest more in digital
technologies will only pay off if they bring further disruption to economies that are
already in turmoil. We will know when politicians are really serious about the coming digital revolution when they start to admit that it will have to cause significant disruption to established business models if it is to pay off.

This is particularly tricky in the UK. The implosion of financial services, long the
flagship of the services economy, means the cultural and media industries, in which
Britain has a strong position, will take on an even more important role. Many
established businesses in these industries were already alarmed by the impact of the
web on their business models. Now they face the steepest recession in modern history, certainly since the start of commercial television and the rise of the tabloid press. Public spending on arts and culture is likely to further constrained due to the
recession. The creative class which breezed its way through the 1990s is about to hit
the wall. The crisis will not be as sudden and shocking as the one that has hit banking but it could be as profound.

For more read here.

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