Growth Expected for Scottish Creative Sector

Scottish companies in the creative media sector are facing a massive potential for growth as the convergence of technology, high-speed networks and content is finally living up to the turn of the century predictions of the tech boom era.

Robert Iger, CEO of Disney, when explaining its partnership with Apple to deliver content to the latest video capable iPod, recently said: “The intersection of great content and great technology creates an unbelievable opportunity”.

It is an opportunity that can be measured in a converged digital market that in 2003 was worth £61 billion and is expected to be valued at £146 billion by 2008.

We live in a world today where high-speed mobile phone networks are now a reality and wi-fi is at the stage where in the US a number of cities are now treating high-speed wireless internet as a basic amenity for citizens, like electricity and running water. The UK has more wireless hotspots than any other in the world after America.

The real driver behind convergence is the combination of speed and easy access to networks. In the UK over 75% of adults have a mobile phone and over 90% of portable computers are sold with wireless networking.

Scotland already has a strong reputation in the gaming sector and is well positioned to take advantage of the current boom which sees mobile gaming at a high in terms of sales growth with funding flowing into the sector as never before.

By 2009, estimates value the sector at $8 billion and active use of downloadable games will grow from the current level of $32 million to $220 million.

This growth is being driven by better rich media handsets and investment from traditional games companies who have recognised the potential of the market now that networks can deliver the bandwidth necessary.

The hype of recent years about watching television on mobile devices is fast becoming reality as high-speed networks and video compression technology are developing to a level that can deliver market expectation.

Although 3G networks are currently used to watch some TV content on mobiles, new Digital Video Broadcasting-Handheld (DVB-H) technology is a standard which has been specifically developed for the broadcast of digital TV signals to mobiles and other handheld devices.

O2 is currently trialling the new technology in the UK with 16 TV channels, including BBC 1 and 2, ITV 1 and 2, and Channel 4. Shows such as Coronation Street, MTV, BBC News 24 and CSI are available. Orange has already found that 36% of its 3G customers watch its TV service during lunch breaks as a short TV “snack”.

It is estimated that by 2010 more than a third of annual digital TV devices sold will be mobile phones, as handset vendors strive to put a TV in everyone’s pocket.

There is no doubt that in digital television set-top boxes will continue to account for the bulk of demand, but a phenomenon known as ‘place shifting’ will create a strong pull to mobile devices.

Place shifting is the term used when content is streamed from a PC, TV, set-top box or DVR to a mobile or handheld device. Early trials show that maximum viewing times are currently about 15 minutes, but it is clear that full viewing isn’t too far over the horizon.

There is an immediate opportunity for content developers to create short clips optimised for mobile devices. Endemol, the UK’s largest reality TV production company, has already announced plans to launch an ‘Extreme Reality Channel’ for mobile devices.

Television and gaming are not the only mediums to recognise the opportunity that convergence creates. The film industry is now producing short movies specifically for mobile devices. In Scotland, Wireless Innovation has been working with Scottish Screen on their Pocket Shorts initiative that is encouraging filmmakers to make three-minute movies for mobile phones.

Scotland has over 120 indigenous companies developing products, applications and content across the full wireless and mobile value chain.

Approximately 7% of Scotland’s employment is within the creative industries sector and Wireless Innovation is working closely with many of them to help maximise a huge market opportunity. As well as Scottish Screen, Wireless Innovation have been in discussion with Channel 4 and the Ted Turner Corporation to help companies exploit those opportunities.

As the global phenomenon that is convergence continues to accelerate, the creative media industry in Scotland is well positioned to emerge as a leading force within the sector.

By Ian Downie, Business Manager, Wireless Innovation.