Task 3: Regulation in the Interactive Media Sector 15:00

Regulatory and professional bodies:

           Phonographic Performance Limited (PPL)
           The International Visual Communication

           Association (IVCA),

           Worldwide Web Consortium (W3C)

           British Web Design and Marketing Association

           British Interactive Multimedia Association (BIMA)

Regulatory issues:

€        censorship,

€        taste and decency,
           Monopoly,
           Consumer choice.

Preliminary Notes:
Interactive media in the consumption of music entertainment in the new media market.


Phonographic Performance Limited


PPL are the UK music licensing company that undertake the collective rights management from recorded music and music videos used in public performance, broadcast and new media use.


Everywhere in the UK that play music available for public consumption must have a PPL license. From bars to schools to restaraunts to internet radio stations, everybody.


The PPL also have international bilateral agreements to allow licensing to work overseas.


In 2008 PPL collected £127.6 million and distributed £110.3 million to performers and labels.


The International Visual Communications Association


The IVCA represents its members to governments and other stakeholding organisations. They promote effective communication for business and public bodies.


The IVCA are a professional body and if you are in a sector that communicates internationally you would most likely join this. They work in a similar way that TES work with Teachers. The IVCA seta  framework to guide businesses with their communications internationally and hold networking events and conferences for companies and organisations to network and talk about stratergies of effective communications. The IVCA hold award ceremonies each year where its members can win awards for using communications with guidance from the IVCA effectively.

Worldwide Web Consortium
The WorldWide Web Consortium is an international community of people where member organisations, full time staff and public members all join to discuss and develop how to move the web forwards by setting standards. It is led by the inventor of the Internet, Sir Tim Berners-Lee and W3C CEO Jeffrey Jaffe. The W3C's mission is to lead the web to its full otential.

British Web Design and Marketing Association

The BWDMA is an inclusive organisation that is open to all individuals and companies that have interests in the new media sector. The association aim to improve E-Business stratergies through sharing knowledge based on best practises in the industry.

Income of the association is generated through subscription fees, private funding, advertising, corporate sponsorship and event management.

British Interactive Multimedia Association

The British Interactive Multimedia Association is an industry body that represents the UK's digital industry. It was formed in 1985 and is partially made up of digital agencies. Each year they hold an awards ceremony to celebrate excellence in the UK's digital industry. They have an online hall of fame to recognise those who have contributed well to the UK's digital industry.

BIMA have offices in England, Scotland & Wales with regional representatives. They also represent the UK globally in the interactive multimedia sector.

Censorship

Censorship of this sector would involve censorship of the networks and models used to access the media. The most common gateway to these services is using the Internet.

The Internet is notoriously dofficult to censor as it grows a vast amount each day. Governments have tried to do this as we have seen lately protests regarding ACTA where the EU were trying to push through laws allowing the EU to ban access to websites. A similar movement was seen in the USA with protests regarding SOPA where the US Government could restrict access to websites to US citizens. Some countries governments do have laws preventing access to content they believe will be harmful to its citizens such as in China, Iran, North Korea, Saudi Arabia, Vietnam, Egypt and many more. In countries that governments do monitor Internet access they must abide by the countries laws and follow other regulatory issues such as taste and decency and consumer choice.

In the countries where the Internet is not monitored by the government like here in the United Kingdom, it is often left to companies and individuals to regulate self-censorship of Internet access made through their connection, often for reasons of protecting their employees, stop them from accessing websites they do not want them to access whilst in work and other reasons.

An example of this here in my Sixth Form College, Park Hall Academy. The Internet connection inside the Academy is regulated by technicians so that students and staff are protected from harmful and dangerous content as well as to stop students and staff from using media they shouldn't be when inside the Academy.

Taste and Decency

Taste and Decency is where everybody involved on the media product consider its taste and how it will appeal to its target audience. It usually comes down to the products location, governments laws and morals seen in the country. Some examples of this is if you are launching an application stereotyping British people, this would perhaps not be best placed to be sold in the United Kingdom as this is in the British Isles and the citizens there would most likely not enjoy the product.

Taste and Decency is particularly important in countries that have much surveillance on their citizens Internet access as the Internet is a growing delivery method for interactive media products. In places like Syria where the internet is censored, taste and decency would have to appeal to not only the countries citizens but also the government there. It would be important not to upset people whom have lots of authority or influence as this could lead to the demise of the product.

Further issues in taste and decency is how well the product integrates with a country. Different countries have different standards. For instance, Syria has a lot of ethnicities and minorities where lots of people are religious. For a product to be rather succesful there it would be best not to touch the subject of religion because this could offend different people. Another sensitivity in Syria is the Arab Spring which has seen lots of protests and Syria being suspended from the Arab League. With 90% of Syria's population being Arab this is a sensitive issue, particularly at the moment and any products that touch upon the subjects of protest or the uprising of Syrian citizens would perhaps not be so succesful as the Syrian government may not appreciate a product like this operating in their country.

Monopoly

Monopoly is the exclusive posession or control of a trade in a service.

In the Interactive Media sector this is a sector with lots of innovation and fearce competition to meet the demands of new audiences looking for the latest interactive media products. Just yesterday (22/03/2012), the chancellor, George Osborne stressed how important the UK's digital industries are for the grows of the UK economy. It was announced in his second budget in 2011 that £100 million would be available for super fast broadband access and yesterday in his third budget he announced a further £50 million for smaller cities to have better Internet access. I quote from Mr Osborne's Budget 2012 announcement: “The fastest digital speeds in the world available in our cities, with the most connected countryside in Europe – and the most creative digital content anywhere. That’s what a modern industrial policy looks like.” It is clear that the UK government are relying on the Interactive media sectors in the United Kingdom as something that our citizens are good at creating, after all, even the creator of the Internet Sir Tim Berners-Lee was from London, UK.

From music consumption to video games, there are lots of companies behind the products looking at ways to tap in to the industry and how best to collect revenue from the industry. A company that I think are playing the industry well is Apple. Apple is the largest publicly traded company in the world by market capitalisation and is the largest technology company in the world, more revenue and profit than Microsoft and Google combined. In some ways people might think that with Apple having so much control in the Interactive Media industry that they may seem like a Monopoly to some people. Apple have an App store with more than 725,700 interactive media products. Whilst the developers here choose to submit their products to the app store, it is there choice which is why Apple can't be criticized for acting like a monopoly. Apple are a marketplace. If this is how monopolies were judges then eBay (online auction website) could be seen as a monopoly in the second hand goods industry, but of course, sellers, companies and individuals all choose to place their items in this marketplace. Of all applications published in the App store, Apple take a 30% cut of the sale of the product as Apple has acted as a vendor of the product.

Consumer choice

There are many different aspects considered in consumer choice. The main three are demand, consumption and preferences. A producer of content would consider each of these closely to make sure that their marketing campaigns are effective.

Demand

Product demand is something that changes a lot in the Interactive Media sector as new products are released each day to feed the demand for various genre of product. In this setor the highest demand comes from entertainment. People want to be entertained short-term and long-term. A short-term demand we would see is playing a game on a mobile phone while travelling places. A long-term entertainment type in this sector could be a video game to complete through a course of time. The highest and easiest demand is the short-term entertainment and we see this with the Apple App Store in the volume and success applications has had.

An example of this is the game 'Angry Birds' which is cross-platform available on computer, mobile handsets and other consoles. The game cost Rovio $140, 000 to create the game and it made over $7 million after it was published to these platforms.

Consumption

Consumption is an important aspect for content producers to consider. They should consider who will be using the product as well as who might be purchasing the product. In Interactive Media consumption is made mostly on the basis of the content being there and consumers being able to instantly access this. This can drive decisions and is something that has hurt other physical economies.

An example to study that has became more noticable is the demand for video entertainment. Consumers can access a whole host of premium movies that are available from VOD (Video on Demand) retailers and in rental retailers only. This has hurt Blockbusters video rental store considerably. The choice a user has of either finding a video retailer versus downloading the film from the Internet is a no-brainer to a lot of consumers, they would much rather download this because it is instant and means they can consume this faster. Many consumers may sacrifice the benefits of visiting a video retailer in able to download the movie, such as quality for example.

Preferences

Preference in Interactive media can be defined in the term of a technical preference of a personal preference. As a personal preference this would have to meet the requirements that a user would expect from the product. The demands that a user would place on a product would be, for example, in an action game they would expect a lot of fast paced action, levels to complete in the game and a way of loging achievements in the game. As a technical preference in an Interactive media product, these requirements would differ such as the quality of the product, resolution, interactivity, how well the produt functions and how the product runs on the device it is being consumed on.

Case Study: The impact online movie rental companies have had on physical movie rental companies.

Online movie rentals is something that the UK have been use to for a while now. The new sector really boomed around 2006 when Apple launched movie rentals and purchases over their iTunes platform. However, other services have been available before this like Lovefilm has been available in the UK from 2001 including its subsidiary companies. These methods stream or download the movie to your device and allows you to watch it through there with copyright protection applied to the download so it can only be played on licensed devices.

The download or streams image and sound quality varies with your Internet connection. If your connection is slow the vendor would usually supply you with a lower quality version so you are able to watch the film sooner; there are usually options to toggle how this works.

This method of consuming movies has damaged the profits seen by Dish Network, the company who own Blockbuster. As more people would prefer to reach their media more quickly, the Internet allows this to be an instant product so consumers do not need to leave their home.

Below I have created a report on how the share price has changed between Netflix and Dish Network. You can immediately see that the share price has mostly grown with Netflix Inc. The share price is rather bumpy for Dish network Corporation after having a serious downfall around 2008.

I believe that consumer choice is what is mostly at play here and with Blockbuster closing stores because of less demand this means they are loosing an area served. Consumers want to reach their movie as quickly as possible and personally if I did not have a Blockbuster store nearby then I would not like to travel a long distance to reach a Blockbuster store, I would most likely choose to stream through my broadband using Netflix.

For Blockbuster to become more succesful I think that they need to consider how their consumers behave and adapt their business stratergies to cater for this, perhaps opening movie streaming as a part of their business.