Report on business models,
value chains and business
development services in the
audiovisual/creative industries:
cases of the Łódź and
Małopolska provinces and West
Denmark
Research report related to WP3, WP4 and WP5 of the
BSR project First Motion
Prepared by Filmby Aarhus, Alexandra Institute and High Tech
Accelerator Innovation Center University of Lodz Foundation
Aarhus – Łódź, July 2011
Contents
Introduction .................................................................................................................................................4
The research motivation ................................................................................................................................... 4
Methods of research ......................................................................................................................................... 5
The report overview.......................................................................................................................................... 6
Chapter 1 - Business models and value chains in audiovisual/creative industries ...........8
What is a business model? ................................................................................................................................ 8
How do innovative models emerge? ............................................................................................................. 8
Basic elements of business models................................................................................................................ 9
New business models in audiovisual/creative industries ............................................................................ 11
Value chain in the audiovisual/creative industries...................................................................................... 12
Revenue Models .......................................................................................................................................... 15
Content and Distribution Form.................................................................................................................... 21
Business models and value chains in audiovisual/creative industries in Poland and Denmark – empirical
results .............................................................................................................................................................. 24
Brief conclusions ............................................................................................................................................. 34
Chapter 2 - Clusters in audiovisual/creative industries............................................................ 35
What is a cluster? ............................................................................................................................................ 35
Characteristics of analyzed audiovisual/creative clusters .............................................................................. 36
Poland.......................................................................................................................................................... 36
West Denmark............................................................................................................................................. 41
Clusters in audiovisual/creative industries in Poland and Denmark - empirical results from the surveys..... 44
Brief conclusions from the cluster-related quantitative research done in Poland and Denmark .................. 50
Qualitative Cluster Research of Filmby Aarhus:.............................................................................................. 51
Brief conclusions from the cluster-related qualitative research done in Denmark........................................ 59
Chapter 3 - Business development services for cluster-based companies ........................ 61
Business development services for Polish companies operating in the audiovisual/creative industries –
results of the quantitative survey ................................................................................................................... 61
Business development services for Aarhus-based companies operating in the audiovisual/creative
industries – results of the qualitative study.................................................................................................... 63
Identity ........................................................................................................................................................ 64
Communication ........................................................................................................................................... 65
Cross media ................................................................................................................................................. 67
Matchmaking .............................................................................................................................................. 69
Growth......................................................................................................................................................... 71
Brief conclusions ............................................................................................................................................. 72
General conclusions and recommendations.................................................................................. 74
2
Conclusions and recommendations for local and regional authorities .......................................................... 74
Conclusions and recommendations for universities, R&D institutions and business support organizations 75
Conclusions and recommendations for cluster animators and managers ..................................................... 76
Bibliography.............................................................................................................................................. 79
Netography ................................................................................................................................................ 80
Index of figures......................................................................................................................................... 82
Appendix 1 Characteristics of research samples ......................................................................... 84
Poland.......................................................................................................................................................... 84
West Denmark............................................................................................................................................. 88
Appendix 2 List of respondents in Poland...................................................................................... 89
Łódź province............................................................................................................................................... 89
Małopolska province ................................................................................................................................... 90
Other provinces ........................................................................................................................................... 91
Appendix 3 Cluster members.............................................................................................................. 92
Mediaklaster................................................................................................................................................ 92
Multiklaster ................................................................................................................................................. 93
3
Introduction
The research motivation
Digitisation has brought changes, which have the potential to stimulate economic growth and the creation of
new high-skilled jobs in the audiovisual and creative sectors. Although audiovisual industries are
differentiated from creative industries, they are strongly interrelated and highly vulnerable to the processes of
digitisation that are taking place nowadays. The thematic scope encompasses support and exploration of
modern communication technologies and the innovative usage of emerging cross-media possibilities.
Digital technologies are transforming the production and circulation of audiovisual content. Consumers will
have access to more content than ever before, available for them to use wherever and whenever they want.
Ten years ago we had business models for the individual creative products such as cinema, TV series,
computer games, books or artworks. Consumers, technology and financing are changing and evolving
rapidly right now. In the process of finding new ways of co-existing in the digital reality, a natural need for
new business models and new ways of structuring cooperative relationships, funding models, distribution
platforms and marketing strategies is arising both internationally and in the Baltic States. The
audiovisual/creative industries in the Baltic Sea Region consists mainly of small and medium sized
enterprises (SMEs) with limited capacities for innovation using their own resources. The research done
within the First Motion project looks at the topic from different angles and combines them into a unified
approach thereby fostering innovation.
Presently, new business models and value chains are based on cooperation among companies of different
audiovisual media and other creative industries and quite often involve the cooperation with research and
educational institutions and other business-education-research market players which are either the private
institutions or stimulated by the city or regional authorities in order to support and organize the local/regional
development of the audiovisual/creative sectors. There is a trend observed on the present audiovisual and
creative markets to organize the cooperation in a formal or informal way, like forming the formal or informal
clusters. Therefore, the relationship between companies themselves as well as between companies and
other research and development (R&D) institutes and universities and other market players were examined
in the research and the clusters are important elements examined in the research, too.
The audiovisual industry needs to develop a new mindset of how to think business. Consequently, the goal
of this research was to provide inputs to that process through examination of the existing situation in the
4
audiovisual media sector in two Baltic States countries, namely Poland and Denmark and analysing the
latest worldwide trends to identify the possible development of new business models and value chains in
these sectors. This research report discusses four interrelated topics: business models, value chains,
cluster development and business development services.
Within First Motion this report will be used to develop two implementation designs for the advancement of
the four topics researched. This will be done for the area of Lodz and the area of West Denmark.
Methods of research
The following methods of research were used:
ƒ
analysis of literature and other sources of information,
ƒ
analysis of statistical data available,
ƒ
the quantitative research, based on the answers received from the CAWI (computer aided web
interviewing) research conducted among companies located in four regions of the Baltic area:
-
two regions in Poland – Łódź Region in Poland (with the main city of Łódź), Małopolska Region in
Poland (with the main city of Kraków)
ƒ
two regions in Denmark – the Central Region of Denmark and North Region of Denmark
the interviews with the company executives made in the selected companies located in the
cluster/technology park in Aarhus, managed by the Filmby Aarhus
ƒ
the interviews conducted with the managers of the cluster organizations (both formal and informal) and
the city and regional organizations in the above mentioned two regions in Poland.
Therefore the report uses different methods in collecting knowledge. By definition quantitative research
must be objective and statistically valid. It’s about numbers and objective hard data. A scientifically
calculated sample of people from a population/industry is asked a set of questions on a survey to determine
the frequency and percentage of their responses. We have used the quantitative output from the surveys to
qualify interviews in the further qualitative research.
Qualitative research is much more subjective than the quantitative research and uses very different
methods of collecting information, mainly individual, in-depth interviews and focus groups. The nature of this
type of research is exploratory and open-ended. Small numbers of people are interviewed in-depth and/or a
relatively small number of focus groups are conducted. The research activities were done together with the
companies in the regional clusters: workshops, company relation mapping, semi-structured interviews,
cultural probes and observations.
5
The quantitative research data was used through a series of analysis and discussions to create a number of
overall themes and needs. Systematic mapping was used to anchor and relate each need or theme to each
other, and to give inspiration for suggestions for meeting the needs through business development services.
The report overview
The research report comprises four chapters.
The first chapter describes the business models and value chains traditionally used in the audiovisual
sector and how to take these a step further into the new digitized media world. Challenges of a digitization
era call for the emergence of new business models and value chains that suit best the expectations of
customers and effective delivery of audiovisual products and services to the markets. Specific revenue
models have been described.
The second chapter is focused on cluster dynamics and how clusters within the audiovisual sector can
increase productivity, innovation and creativity. It will draw on recent research on clusters, which will be used
to collect some general guidelines for facilitating cluster development. With the thoughts collected from the
various reports on clusters and the survey done this will be a point of departure for the further process of
transferring this to the audiovisual industry and to the target clusters.
In the third chapter there are presented different ways of taking the temperature on a creative cluster
including the findings of the mapping of companies in the clusters. The output is a catalogue of business
development services that seem to be relevant to implement in or inspire other clusters.
This report will be used to develop two implementation designs for the advancement of the four
topics researched. This will be done both for the area of Lodz and the area of West Denmark. Both are
serving as a case study for their relevance. This will enable to produce meaningful and tested
recommendations, valuable to other audiovisual/creative clusters. Both will be done individually and in
separate documents. In the final report, containing not only research and implementation designs, but also
evaluations and final conclusion all will be combined into one final report, reaching individual conclusions for
both areas and overall conclusions and recommendations based on the comparison of both.
This report is built upon the research within the Interreg IV B project entitled First Motion, done by the
following project partners: Filmby Aarhus and Alexandra Institute both located in Aarhus, Denmark and High
Tech Accelerator Innovation Center University of Lodz Foundation located in Łódź, Poland. First Motion is
a collaborative project financed from the Baltic Sea Region 2007-2013 programme that aims to fund new
formats, research new markets and value-chains, develop training and education courses up to the master
level, and improve clusters and policy guidelines for the audiovisual/creative sectors.
6
This report is a reflection of work carried out within three different work packages (WP) of the First Motion
project. The research combines the research activities from WP3, WP4 and WP5 in this report, because
they, from a regional perspective, are interlinked with each other. The different research areas now form
separate chapters within a unified report, providing better readability.
The quantitative research was executed from February to May 2011 in Poland and from January to March in
Denmark. The qualitative research in Denmark was executed in April and May 2011. The report was drafted
in June 2011.
7
Chapter 1 - Business models and value chains
in audiovisual/creative industries
In this chapter we start with a definition of a business model because it is used nowadays as a buzzword,
which makes a lot of confusion. Then, we try to give a hint how innovative business models emerge and in
what areas they can vary. Special emphasis is given to new business models emerging in
audiovisual/creative industries and their main revenue foundations. As new business models stem from
modifications made in the value chain, we attempt to highlight changes that can be made within core
activities of companies operating in the audiovisual/creative industries to follow the challenges of the new
digitization era. In the end we present empirical results from the survey carried out in in selected regions in
Poland and Denmark where some issues concerning business models and value chain were analysed.
What is a business model?
The concept of the business model first appeared in the economic literature in 1957, but the term became
fashionable only in the 1990s. What really is the business model? One thing we can be certain of is that
there is no single, universal definition. The term 'business model' scrolls in many senses and is reflected in
various definitions being sometimes defined as ‘the architecture of income’ which highlights the complexity of
its individual components.
According to Magretta, a business model is a system of specific elements and assumptions about the
industry, customers, their needs, operations, value and profit generation, etc., which must be closely
matched to each other (Magretta, 2002). A proposal for a different definition, quite popular in the literature,
was presented by Afuah and Tucci. According to them, the business model is the adopted method of
expansion and exploitation of resources in order to provide customers with products and services whose
value exceeds what competitors offer and which also provides business profitability (Afuah, Tucci, 2003).
How do innovative models emerge?
The innovativeness of the business model is nowadays at least as important (probably even more) as the
product or service innovation. We have numerous examples of stunning market success achieved by
companies that supply to the market essentially the same product or service available on the market for
many years, but in substantially different ways, using a different business model.
8
The starting point for building an innovative business model is to search for potentially interesting new
options for action. It is important that at the beginning you ask yourself four key questions:
1) What (what variables) can be added to the existing business model to create a new, innovative model?
2) What (what variables) that are part of a typical business model, can be eliminated in the new, innovative
model?
3) Values of which variables in the new model can be significantly reduced below the industry standards?
4) The values of which variables in the new model can be changed or increased significantly above the
industry standards?
Basic elements of business models
Basic elements of any business model consist of:
Creating assumptions about the value follows a sequence of actions taken by the company:
9
Creation of the market offer consists of:
9
Determining the scope of the offer.
What the company really wants to offer to its customers?
9
Determining customer decision-making process associated with the purchase.
What influences customer decision to purchase and for what elements of the offer they will be willing to
pay?
9
Imposition of offer (product or service) on the client's decision to buy.
In other words, how to adjust the offer to customer expectations?
The identification of resources is about:
10
The creation of a financial model is about:
I.
Selecting a model to obtain income.
How will revenue be generated? Is it mainly from the sale of products or services, or perhaps after
sale activities, such as maintenance of the product?
II.
Choosing the model for delivering value for shareholders / stakeholders.
What benefits will eventually reach key stakeholders?
III.
Developing strategies for financial growth.
How will the company develop in the future? For what purposes will the generated income be
allocated?
New business models in audiovisual/creative industries
The audiovisual industries encompass:
9 broadcast
9 independent production
11
9 facilities (including post production, digital special effects and studio equipment hire)
9 film (including production, facilities, exhibition and distribution)
9 interactive media (including web and internet and offline multimedia)
9 computer games
9 corporate production
9 commercials
9 animation
9 transmission
9 photo imaging
The audiovisual industries need to be distinguished from the creative (or content) industries defined as
industries in which the product or service contains a substantial amount of artistic or creative endeavour.
Following the definition of the UK Creative Industries Task Force, the latter covers “those activities which
have their origin in individual creativity, skill and talent and which have a potential for wealth and job creation
through the generation and exploitation of intellectual property”. In addition to the audiovisual sector, creative
industries include architecture, art and antique market, design, software, music, the visual arts (painting,
sculpture), the performing arts (theatre, opera, concerts, dance), and book and magazine publishing
(European Investment Bank, 2001).
The global media world has led to many new formats and technology platforms. This means that media
products are used in a lot of different combinations than previously. Cross media is a new paradigm of
media formats, genres, platforms and lots of opportunities to create and share knowledge and work together
on new products, new services, new business models, new technology and thereby develop new forms of
expression, new communications and new experiences.
Several years ago we had simple business models of individual creative products such as cinema, TV
series, educational materials, computer games, books or artworks. Today we need to develop new business
models and offer new cooperative relationships, funding models, distribution platforms, marketing strategies,
etc., because consumers, technology and financing options are rapidly evolving.
Value chain in the audiovisual/creative industries
Taking the audiovisual industry as an example, the structure of its value chain appears to be
multidimensional and complex. We can distinguish from numerous different players operating in the value
chain such as content providers, right holders, content distributors who carry out various business activities
12
from the production of content such as films, TV programmes or music to its delivery via cinema, TV
channels or Internet portals.
The value chain approach describes business activities as a sequence of investment, production, sales and
billing or collections.
Below in Fig. 1 an example of an independent value chain in the film industry is presented.
Fig. 1. The value chain – example of a film industry
Source: adapted from Zerdick et al. (2000), presented after European Investment Bank (2001, p. 11)
Likewise business models, the traditional value chains in the audiovisual/creative sectors are not sufficient in
a new (digital) media world, where technological changes have created new platforms and new formats and
where the usage patterns have changed radically.
13
The new media value chain describes the range of value added activities that occur across each of the new
media sectors, and which are involved in bringing products/services to each of the sector’s markets. It
comprises ten core activities as defined below, which include (Forfas, 2006):
(1) Digital
media
enablers
(enabling
technologies)
–
enabling
technologies
are
the
core
technologies/software that are developed to enable the production, management and distribution of
digital media. They can loosely be defined as “foundation” technologies/software;
(2) Content design – this includes concept development and the creation of content in digital format
(data, audio, video etc);
(3) Content authoring – content authoring is an integral aspect of content design. It involves building the
necessary functionality for establishing the content access, navigation system, edit and file
management options for the content;
(4) Content conversion/packaging – content conversion is defined as the conversion of analogue
content into a digital format, i.e. content digitisation. Content packaging is the manipulation
(customisation and aggregation) of original content into suitable formats, e.g. CD-ROM production,
video coding for transmission purposes;
(5) Content management – content management is defined as cataloguing, tracking and managing of
assets for repurpose, reuse and distribution across multiple channels from one single source.
Content management applications let diverse types of users aggregate, organise, manage, create
access to and deliver all types of content, including documents, text, images, application data and
streaming content. Content must be collected and managed across the entire content lifecycle
(creation to distribution);
(6) Content storage – content storage covers all forms of devices and services used to store data.
Devices include DVD and CD-ROM right through to high end enterprise storage systems. Storage
services can include storage of servers/data itself, high performance data transfer, protection against
data loss (“redundancy”) and data backup;
(7) Content publishing – this incorporates digital rights management and describes securities,
permission, and rules for delivering, viewing, disseminating and accessing content along with
ownership rights etc. Content is also priced and packaged for sale at this stage;
(8) Content marketing – activities connected with the advertising and marketing of digital media;
(9) Content distribution – content distribution involves the process of preparing content in a format
suitable for distribution, e.g. preparing content for streaming. For the Internet, this would also include
management of the services covering Internet access service, web traffic management and analysis;
and
(10)Infrastructure/access
provision
–
infrastructure
provision
covers
the
implementation
and
maintenance of the platforms over which Digital Media is distributed or accessed. These include
14
broadband and narrowband telephony networks, satellite, cable and wireless. Access provision also
incorporates media access devices such as PC, TV, consoles, etc.
Revenue Models
In our research of business models we have studied new revenue models. From Fig. 2 it is apparent that a
revenue model may be considered an element of the overall business model, specifying the mechanism(s)
used by the firm to generate revenues (Chesbrough & Rosenbloom 2002). Such mechanisms comprise, for
example, IPRs, territorial rights, release windows, and brand name reputation.
The type of revenue model fundamentally depends on: 1) content and distribution form, i.e. the type of
product/service offered to the end-user, and; 2) revenue streams, i.e. whether the source of revenue is endusers (customers) or a third-party. In the following part of the chapter this is elaborated in more detail.
15
16
Fig. 2. The constructs of the business model
17
Customer-Based Revenue Models
Customer-based revenue models can be ‘clear-cut’, i.e. the end-user pays a fee for the product or service
offered that covers the full costs of production, or seller-supported (see Fig. 3).
Fig. 3. Customer-based revenue models
‘Clear-cut’ customer-based revenue models comprise:
ƒ
Fixed Payment.
The end-user pays a one-time fee for the product/service. The traditional e-commerce model (e.g.
www.amazon.com) and brokerage model (e.g. www.ebay.com) belong in this category.
ƒ
Pay-per-use / Pay-per-view.
The end-user pays on an ad-hoc basis to use the product/service. This category includes product
leasing (e.g. www.blockbuster.dk and www.leasy.dk), utility models (e.g. electricity and water),
and micropayments (e.g. credits on a poker site).
ƒ
Subscription.
The end-user pays a regular recurring fee to access a service (e.g. www.salesforce.com).
Seller-supported revenue models comprise both the Cross-Subsidy and the ‘Freemium’ model. While
these models are very much alike there are some important differences:
ƒ
Cross-subsidies.
These entail offering a product or service – that may be relatively expensive (such as a mobile
phone) – at a discount. In order to get the discount all customers are forced to buy a complementary
product or service (such as a mobile subscription from a certain provider) at the same time as buying
the main product. The price each customer pays for the complementary product or service should, in
most cases, cover the supplier’s costs of delivering both products/services (e.g. the price of the
subscription should be higher than the discount on the phone). In some cases the supplier may
choose a more risky strategy by, for instance, selling the phone and subscription with a deficit – in
order to increase adoption rate (see the platform strategy below), hoping that customers will freely
18
choose to buy additional complementary products and services (such as headsets, iPhone
applications etc.).
ƒ
Freemium.
End-users get the product or service for free. This will – hopefully – entice some (perhaps 10
percent) users to pay for additional products/services, such as removal of adverts, ‘premium’
content, API/advanced features, support subscriptions etc.). The Freemium model is relatively risky
in that end-users are not forced to buy any additional content – and most of them choose not to.
Moreover, most of the supplier’s expenses must be incurred in advance of delivering the product or
service. The time-gap between these initial costs and first revenues is relatively substantial (and thus
requires substantial financial resources).
ƒ
Donations / ‘Tip Jar’.
End-users get the product or service for free. The supplier relies on voluntary end-user donations
(e.g. www.wikipedia.com). The model is more risky than Freemium in that no added value is
offered. Thus end-users have no real economic incentive to pay a voluntary fee – but choose to do
so for either altruistic or self-promoting reasons.
Third-Party Supported Revenue Models
Third-party supported revenue models entail that a product or service is offered for ‘Free’ to end-users and a
third party pays the fee for a returned service. From Fig. 4 it is apparent that third-parties have different
incentives for paying the bill. In the first case the third-party gets a service (such as an advert on
www.google.dk) from the supplier in return for a fee that covers the supplier’s costs of delivering a product
or service to end-users – who must accept the advert in order to use service offered by the supplier for free.
In the second case the supplier – or referrer – facilitates a transaction between a third-party and end-users
(e.g. www.pricerunner.dk). Often, the revenues of the referrer are contingent on those of the third-party in
that the referrer receives a small percentage from each sale. In the third case the supplier sells a service that
has been ‘created’ by end-users – often from the use of the service offered by the supplier. Google, for
instance, collect a lot of information from users of their many services that is highly valuable to other firms.
Fig. 4. Third-party supported revenue models.
19
Third-party supported (‘Free’) revenue models entail:
ƒ
Advertising / preferential treatment.
One or more third-parties place clearly defined adverts within the website/application. Variations of
adverts include graphical banners, text, inline, pop-over, interstitial, etc. Normally charged by cost
per click, cost per action, or cost per thousand impressions.
ƒ
Sponsorship.
One or more third parties become the ‘official’ sponsor(s) of the website. This could include fixed
(non-rotating, typically prominent) adverts, integration of third-party branding (colours, slogans)
and/or licensing agreements.
ƒ
Paid Content.
Advertorials: third-parties pay to include marketing-led content on the website.
ƒ
Paid Placement (Brand Endorsement).
Third-parties pay to be included in lists or in the application (e.g. comparisons, reviews,
entertainment listings). In the film industry product placement has been common since the 1980s –
as an additional source of revenue and not as part of a ‘Free’ revenue model.
ƒ
Referrer.
End-users are directed to third-party sites, which pay a fee to the website owner for any referred
transactions (e.g. comparison sites).
ƒ
License Content.
Third-Parties are given access to re-use the content from the web-site for their own purposes. While
this model offers interesting opportunities for the music and film industry it is currently difficult to
apply due to copyright legislation.
Additional models
The following business (meta)models can be applied in addition to most of the basic revenue models
described above – i.e. as different ways of reconfiguring activities in the value chain using end-users as cocreators by offering them economic incentives:
ƒ
Revenue Sharing / Affiliate.
End-users are offered a cash incentive to direct customers to the website and make the
website/application generate revenue, by sharing a percentage of revenue with them (usually based
on their personal referrals or popularity of their content).
ƒ
Re-use/Re-sell.
End-users can re-use or re-sell an online service or data/content, usually from User Generated
Content websites, e.g. edit or dub a free film clip available online (into purchasable content). This
model is currently difficult to apply in the music and film industries due to copyright legislation.
20
ƒ
White Label.
The end-user can brand/tailor the online service and re-sell it as their own (typically taking a
percentage of the generated revenue, or paying a fixed subscription cost to the original service).
Long-Term Revenue Strategies
Some of the most successful websites such as Google, Youtube, and Facebook started without a defined
revenue model. Having reached critical mass they then figured out how to generate revenues from the
activity on their site – while many others did not. This represents an ‘invest and reward’ or ‘establish and
exploit’ approach where costs are incurred initially to attract a substantial audience before monetizing.
Long-term revenue strategies are often applied in cases where ‘network externalities’ are important, i.e.
when it is necessary to get end-users to adopt one ‘standard’ instead of another. Consider, for instance, VHS
vs. Betamax, IBM PC vs. Mac, and Google vs. Yahoo vs. Windows Live. Long-term revenue strategies often
represent a dilemma between ‘adoption’ and ‘appropriation’ (profiting). For example, while VHS and the IBM
PC won the ‘standards war’, neither JVC/Matsushita nor IBM profited in the end. In the PC market most
profits instead accrued to Microsoft and Intel – who controlled ‘bottlenecks’ in the value chain – and the IBM
platform became known as the ‘Wintel platform’.
ƒ
Platform.
Establish a platform by aggregating users and/or suppliers of content, then charge for third parties to
participate once an audience has been established, e.g. Google, iPhone, Facebook.
ƒ
Branding.
Build a ‘personal brand’ for yourself/your company. Once awareness is raised, revenues are
generated by selling additional products and services, e.g. releasing a book, consultancy, talks etc.
ƒ
Sell/Exit.
Create a popular application/website, then make it someone else’s problem to monetize, e.g.
YouTube/Google, ZYB/Vodaphone.
Content and Distribution Form
The difference between a product and a service can be defined in terms ownership. A product sale always
involves a transfer of ownership from supplier/seller to user/buyer. On the other hand, a service – or rather
the resources and competences used to produce the service – are always owned by the supplier/seller.
What the user/buyer gets/pays for is access to the service. Therefore, in terms of revenue generating
mechanisms, services are easier to protect since the transfer of ownership implies that products can be
stolen and modified by users.
21
This crucial difference has two important implications for the revenue model. First, whereas products can
only be sold through a fixed one-time payment (loans come as additional services) or ad-hoc payments (payper-use), some services may also be offered through the subscription revenue model. Second, in terms of
revenue generating mechanisms, services are easier to protect. The transfer of ownership implies that
products – unlike services – can be stolen by users.
The Internet has been a ‘game-changing’ technology which has altered the distribution of software, music,
and film dramatically (Gubbins 2010). Before the Internet software, music and film were distributed as
physical products on media such as LPs, CDs, VHS, DVD etc. “Artificial scarcity” was created by controlling
output by time and platform (through release windows), as well as by territory (territorial rights). In this way
access to a given resource is restricted which raises prices to an artificial level – given a demand has been
created in the first place. However, when software, music, and film are distributed as digital products on the
Internet, reproduction and distribution costs and time drop to (almost) zero and national borders disappear.
For instance, a television show that has been aired in the US can be downloaded for free in the rest world a
couple of hours later. While it is currently illegal to do so, it reflects the real costs of reproduction and
distribution – and it is currently the only way for users outside the US to watch the show before it is released
on DVD. Under these circumstances it becomes difficult – not to say impossible – to create and control
artificial scarcity. The most important revenue mechanisms become people’s moral sense and lack of
technological skills (e.g. not able to use torrents).
Due to the negligible costs of reproduction and distribution it is easier to apply a ‘Freemium’ or a ‘Free’
revenue model to digital products. Nevertheless, most digital products are still sold through a typical ecommerce model. While internet stores such as iTunes are gradually beginning to experiment with other
models, artificially high fixed payments (e.g. $1 per track) have in many cases also been applied to digitally
distributed music and film by imposing limitations on the usage of digital content and device (Digital Rights
Management). Although iTunes has (so far) had success with a more or less traditional e-commerce model,
it should be remembered that 95% of all music downloads are illegal – and thus $0.00 is by far the most
common price. While some of these end-users may not be willing to pay anything for music, they may want
to pay for additional services, (e.g. saving the trouble of using torrents).
Digital products, including music and film, may also be distributed as one-to-many services, thus potentially
broadening the spectrum of applicable revenue models. Many porn sites, which have generally been among
the first movers on the internet, such as www.pornhub.com, www.xnxx.com, and www.tube8.com offer film
as ‘Freemium’ subscription services. A large selection of low-resolution porn clips is freely available at these
sites and can be either streamed or downloaded as digital products. Users may choose to pay for additional
“Premium” subscriptions which make it possible to watch and download full length porn movies in digital
(HD) quality. Streaming services such as www.grooveshark.com, www.youtube.com and www.dr.dk provide
22
online access to a large selection of music, movies, and television programs, applying third-party supported
models.
23
Business models and value chains in audiovisual/creative industries
in Poland and Denmark – empirical results
Position of companies within the value chain and the potential to move up the value chain
Most interviewed companies form the end link of the production process acting either autonomously or in
cooperation with some other companies (Fig. 5). Cooperation seems to be of particular importance for
companies in the audiovisual/creative industries.
Fig. 5. Position of company within value chain.
Source: own survey, PL [n=86], DK [n=114]
Companies in audiovisual/creative industries vary substantially as far as cross media reliance is concerned
(Fig. 6). As many as 40% of respondents in Poland and Denmark declared that their products are developed
either to a very large or large degree for cross media channels which illustrates quite a significant focus on
cross media. On the other hand, in Poland one in four respondents claimed they have nothing to do with
cross media channels which indicates they share a traditional view on media which may call for some
promotional activities directed to those companies showing the potential for the company’s growth in times of
new digitisation era.
24
Fig. 6. Degree to which company's products are developed for cross media channels.
Source: own survey, PL [n=86], DK [n=114]
A partly explanation of why some companies (especially in Poland) do not develop their products for cross
media channels can be a lack of competences needed to incorporate new and alternative media channels.
As the survey results show, the prevalent majority (84.3%) of Polish companies stated they needed such
competences and only 12% did not (Fig. 7). The figures for the Danish sample of companies were 53.5%
and 25.4% respectively, which suggests their better preparation to incorporate new/alternative media
channels. At the same time, however, Polish companies appear to be more aware of the necessity to
possess new competences with a low 3.6% of companies who are not certain about that and a high 21.1% of
Danish companies not knowing that.
25
Fig. 7. Degree to which companies need new competences to be able to incorporate new/alternative media
channels.
Source: own survey, PL [n=86], DK [n=114]
The respondents are quite confident that they will be able to attract competent employees on the market
(Fig. 8). The Danish companies are somewhat more certain about that.
Fig. 8. Degree to which company is able to attract competent employees.
Source: own survey, PL [n=86], DK [n=114]
Competitive factors and competitiveness of companies
As Fig. 9 illustrates, among Polish audiovisual/creative companies quality and design are most influential
factors of the company’s competitiveness, whereas in case of Denmark ability to adapt a product or service
to customer needs is put on top of the list of the competitive factors. In both cases, price is ranked relatively
low. These findings show that the competitiveness factors cannot be easily replicated by newcomers.
However, one should also bear in mind that companies in technology-oriented sectors innovate rapidly and
the competitive advantage once gained will unlikely be maintained in the long run.
26
Fig. 9. Degree to which various factors have an impact on the company’s competitiveness
Source: own survey, PL [n=86], DK [n=114]
Failure in protection of intellectual property rights seems not to be a problem for the vast majority of
companies (Fig. 10). However, some of them have already gained a negative experience losing a possibility
to introduce a new business idea or some revenues. What is especially worrying is the fact that most of the
losers experienced that problem many times.
27
Fig. 10. Has company ever lost the possibility to introduce a business idea or some revenues as a result of
failure in protection of intellectual property rights?
Source: PL survey [n=86]
Despite the economic crisis companies in audiovisual/creative industries perform well in terms of sales
(Fig 11). One in four companies achieved a considerable growth and other 41% of companies grew at a
moderate pace over the past two years. Stagnation or decline in sales was mentioned by 25.3% of the
respondents. In Denmark the proportion of growing fast companies was substantially lower, but still the
number of growing companies outnumbered significantly the share of declining firms.
Fig. 11. Sales performance over the past 2 years.
Source: own survey, PL [n=86], DK [n=114]
Change in existing markets and product development in existing markets appeared to be the major sources
of companies’ sales growth over the last 2 years in Poland (Fig. 12). This suggests that companies in the
audovisual/creative sectors rather explore the existing markets than expand into new markets. The picture in
28
Denmark was slightly different with a bit more than half of companies growing as a result of changes in
existing markets and a considerably higher proportion of companies growing as a result of launching new
products on new markets.
Fig. 12. Major source of companies’ sales growth over the past 2 years
Source: own survey, PL [n=86], DK [n=114]
As Fig. 13 shows, companies in both Poland and Denmark expect their sales to grow for the next 2 years.
This optimism is quite remarkable in view of rather pessimistic predictions made by companies operating in
other industries as shown by other studies.
Fig. 13. Predictions about sales performance for next 2 years.
Source: own survey, PL [n=86], DK [n=114]
29
The growth of companies is going to be achieved in different ways in the analyzed countries. Whereas in
Poland it will be primarily the result of product development in existing markets, in Denmark it is presumed to
occur due to change in existing markets (Fig. 14).
Fig. 14. Predictions about sales of companies' product/services.
Source: own survey, PL [n=86], DK [n=114]
Companies in audiovisual/creative industries are more likely to go international in comparison with their
counterparts in other sectors. What is really a surprising result is the fact that more Polish companies than
Danish ones in audiovisual/creative sectors are already present in international markets (Fig. 15). This is
even more astonishing in view of the fact that smaller economies such as Danish one are more likely to be
internationalized than larger ones such as Polish.
POLAND
DENMARK
30
Fig. 15. Presence on international markets.
Source: own survey, PL [n=86], DK [n=114]
The survey revealed quite remarkable differences in the use of different methods of promotion. In Poland
companies promote themselves primarily through own website. In Denmark networking is the method
companies rely on most, which is mainly about trust and confidence between various entities and/or people.
Fig. 16. Degree of use of different forms of promotion.
Source: own survey, PL [n=86], DK [n=114]
Product and process development
31
Companies in audiovisual/creative industries tend to be much more innovative than companies at large
(Fig. 17). About 80% of the respondents both in Poland and Denmark indicated that they launched new
product or service over the past two years, whereas the proportions for companies at large are much lower
(ca. 50-60%).
POLAND
DENMARK
Fig. 17. New product / service development over the past 2 years.
Source: own survey, PL [n=86], DK [n=114]
The vast majority of companies developed their products or services alone over the past 2 years (Fig. 18).
Only small portions of companies developed their products or services in cooperation with third parties.
Fig. 18. Method of product/service development over the past 2 years.
Source: own survey, PL [n=86], DK [n=114]
32
Almost half of the interviewed companies both in Poland and Denmark developed new production processes
over the past 2 years (Fig. 19). Thus process innovation is less likely to take place within the
audiovisual/creative industries than product innovation.
POLAND
DENMARK
Fig. 19. Development of new production processes over the past 2 years.
Source: own survey, PL [n=86], DK [n=114]
Likewise the development of products or services, the prevalent majority of companies developed alone new
processes over the past 2 years (Fig. 20). Process innovation involves a bit more frequently third parties
than product innovation.
Fig. 20. Method of process development over the past 2 years
Source: own survey, PL [n=86], DK [n=114]
33
Brief conclusions
ƒ
Rapid technology changes taking place nowadays have exerted a continuous pressure on companies to
innovate. One of the sectors of the economy where these changes are visible with even more strength is
audiovisual/creative industries. These changes involve the emergence of new business models and new
configurations of the value chain where companies seek for gaining the competitive edge and higher
efficiency of operations. Basis for the changes is taking new assumptions about the value that can be
delivered to the customers, changes made in the market offer, search for new resources and choosing a
different financing model.
ƒ
As the results of the studies carried out in the regions of Poland and Denmark show, a way to respond to
the challenges of new technology paradigm in the audiovisual/creative industries is the achievement of
as much flexibility as possible which is done mainly through adoption of an organizational structure of
virtual organizations where companies supplement their competence gaps on a demand basis.
ƒ
To a large extent companies operating within the audiovisual/creative industries develop their products
and services for cross media channels. The competitive edge is built mainly on quality and design
(especially in Poland) and on the ability to adapt a product or service to customer needs (especially in
Denmark), with a relatively minor importance of price, which allows for companies to build quite
sustainable advantage.
ƒ
These findings also suggest a predominant role of human capital and knowledge in further development
of such companies.
ƒ
What the survey also showed is that the majority of companies in the audiovisual/creative industries
proved to be able to achieve a considerable growth also in times of a global economic crisis. This
provides evidence of high potential of these industries to become a major force of local and regional
development, especially in view of good prospects for the future from the companies themselves.
ƒ
Innovation is put at the heart of activities carried out by companies in the audiovisual/creative industries.
The indices of innovation for these companies outrun considerably the respective figures for companies
at large, with about 80% of companies in these industries that launched new products or services over
the past two years.
ƒ
What the survey also depicted is that these innovations serve primarily the existing markets in Poland
whereas in Denmark they are launched onto new markets. This shows a relative saturation of the Danish
market where products and services need more radical innovation.
34
Chapter 2 - Clusters in audiovisual/creative
industries
Our point of departure is the notion of a cluster. Then, we characterize the audiovisual/creative clusters
in Poland and Denmark in which the quantitative analyses were made. Then the results of surveys
concerning the clusters are discussed. Finally we will present the qualitative research from Filmby Aarhus.
What is a cluster?
Although industry clusters exist in a wide variety of structural configurations, the key characteristics of
clusters are the numerous linkages among geographically proximate firms through market and non-market
interactions, as well as linkages with geographically proximate supporting firms and institutions, especially
suppliers, business services, research institutions, and educational institutions. In principle, therefore, a
cluster approach for creative industries is viable and consistent with the large scholarly and practitioner
literature that has emerged and investigates clusters in many locations and industries.
Media industries are highly clustered, and the clusters are practically always located in major urban areas.
Most of the documented media clusters are located in major cities of Western Europe and North America –
city regions that have developed influential commercial media industries that export beyond the city region,
or internationally.
Evidence suggests that creative industries may be considered as economic growth drivers and may play an
even more strategic role in the innovation system as catalysts of variety creation and facilitators of systemic
evolution (Potts and Cunningham, 2008). Clusters are now more prominent than they have ever been. Porter
(1998) claims they are critical to a region’s competitive capacity. They lead to increased productivity by
enabling better access not only to skilled labour, suppliers, institutions and public goods such as government
funding, but also to specialized information. Proximity also allows firms to compare themselves directly with
competitors. Clusters are innovative milieu within which proximity and trusting relationships facilitate the
exchange of knowledge. Proximity raises the pace of innovation as companies compete to maintain a
competitive advantage.
Concentration, or clustering, gives businesses an advantage over more isolated competitors. It provides
access to more suppliers and customized support services, to experienced and skilled labour pools, and to
35
the inevitable transfer of knowledge that occurs where people casually meet and talk business. Clustering
enables companies to focus on what they know and do best; they need not do things they do not do well.
Firms also benefit from synergy. Companies able to operate more or less as a system can use their
resources more efficiently and collectively produce more than the sum of their individual outputs.
Among all of the advantages of clustering, none is as important as access to innovation, knowledge, and
know-how. Although many factors affect the competitive advantages of clusters, none is as important as the
competencies they embody.
Characteristics of analyzed audiovisual/creative clusters
Below the short description of the cluster initiatives in the research areas will be presented as the contextual
information is vital to understand the results of the surveys.
Poland
There are at least four remarkable geographical concentrations of companies operating in the
audiovisual/creative industries in Poland. These include the Mazovia province (with the Poland’s capital in
Warsaw), the Łódź province (with the main city of Łódź), the Małopolska province (with the main city of
Kraków) and the Pomerania province (with the main city of Gdańsk). We decided to select the Łódź and
Małopolska provinces for some reasons.
The choice of the Łódź province as the study area was quite evident as it is the location of two partners of
the First Motion project: the High Technology Accelerator Innovation Center University of Łódź Foundation
and the Łódź City Council. Moreover, Łódź is the significant centre of Polish film. It is because of the worldfamous Leon Schiller Polish National Film, Television and Theater School that educated Oscar winners:
Andrzej Wajda (honorary Oscar in 2000), Roman Polanski (awarded for ‘The Pianist’ in 2003) and Zbigniew
Rybczyński (Oscar for short film ‘Tango’ in 1982). There is also the Studio of Small Film Forms Se-Ma-For
whose artistic baby – the film Peter and Wolf – won an Oscar in 2008. In addition to that the Łódź province
seems to be an interesting case also because it relied very much for more than 200 years on traditional
industries (mainly textiles) and nowadays is undergoing the process of restructuring of its economy’s
structure.
The Małopolska province was selected to be included in the study as it is similar to the Łódź province in
some respects. Firstly, its main city Kraków has the similar number of inhabitants (both cities have more than
700,000 inhabitants). Secondly, both cities host film commissions being non-profit public entities that attract
media producers to shoot on location in their respective localities offering their support for productions.
36
Thirdly, in both regions there are technology parks whose support also encompasses creative businesses.
Their shareholders in both cases are local universities which provides a link between industry and science.
Fourthly, in both regions they’re at least a few institutions that formally manage respective media clusters.
Fifthly, regional authorities seem to appreciate the role of audiovisual/creative industries in fostering regional
development which is reflected in financial support given to some initiatives undertaken in this field.
Łódź
Małopolska
Fig. 21. Łódź and Małopolska provinces, Poland
Source: own graphics
Lodz Media Cluster
The Lodz Media Cluster is located in the centre of Poland. It started its activities in March 2007 with signing
of the Letter of Intent by representatives of nearly 50 Lodz-based media companies, universities, and local
and regional authorities. These entities declared to actively contribute to the objective of creating and
developing the Media Cluster in the Lodzkie region, support each other’s actions aiming to attract investors
and funds for the development of joint projects and adjust their range of services to the needs of the entities
active within the Media Cluster. In June 2007 the Foundation Media Cluster was established with the aim to
coordinate activities of the Lodz Media Cluster.
The current cluster members are listed in Appendix 3.
37
Fig. 22. Organisational components of the Lodz Media Cluster
Source: own graphics
The key objectives of the Media Cluster include:
9 to enhance the efficiency and competitiveness of the regional media industry by reinforcing the
networks linking local entrepreneurs, business and professional bodies, institutions of higher
education, research and development centres, and other legal entities and natural persons;
9 to create platforms for exchange of ideas informed by the potential of the Lodzkie Region’s media
circles, and support their business projects;
9 to incubate and develop innovative media projects that fit in the infrastructure and the strategic
targets of the City and the Region;
9 to build relations with transregional and transnational media investors;
9 to stop the outflow of university graduates, educate new human resources and create attractive jobs
in the area of the media industry;
9 to create Lodz’s image as a city that is friendly to media investors, boasts modern infrastructure and
the resources necessary to implement most advanced film, television, and multimedia productions.
The analysis of the Media Cluster activities carried out so far shows that not all the objectives of the cluster
were accomplished. As the main drawbacks of the cluster one should mention that the cluster failed to win a
strategic investor in the media industry and perform specific activities related to the mission of the cluster.
The problem is the involvement of cluster participants in its activities. Participants remain rather passive and
do not show up any initiatives associated with the activities of the cluster. The initial enthusiasm associated
38
with the creation of cluster began to fall with successive failed initiatives and failures to meet funding for
projects. On the account of successes one needs to count the initial consolidation of the media milieu around
the cluster idea and building upon the city promotion based on the film and media industry. The Lodz City
Council established the Lodz Film Commission whose main aim is to promote the city of Lodz and the region
as being friendly to film, television and multimedia productions as well as other audiovisual initiatives. It
offers assistance in finding film locations, obtaining permissions and in negotiations with the property
owners, provides information about film, television and multimedia production specialists in the city and
region, also about industry supporting firms and institutions such as counsellors, translation offices,
advertising agencies, media, etc., and provides information about the city resources such as production
facilities, etc.
The most challenging problem now for the cluster vitality is to get finance for the cluster activities. There are
high expectations among the cluster members concerning the possibility to win funds from the European
Union’s Structural Funds designated for clustering initiatives. However, after the first wave of enthusiasm the
initial failures of the cluster activity resulted in splitting the cluster identity and the media-focused milieu
whose the most evident expression is the emergence of three different groups of stakeholders that applied
for EU funds in the latest call for proposals (in May 2011).
Multiklaster
The Cluster of Multimedia and Information Systems was created in August 2006 in Nowy Sacz by NationalLouis University in collaboration with SMEs from the creative industries sector located in Malopolska, Silesia
and Mazovia regions. This is a supraregional network of collaborating innovation support institutions such as
Technology Park, R&D centre, business incubator, cooperation cluster, or venture capital and more than 60
innovative and highly specialized small and medium-sized companies from the new technologies and new
media businesses all over Poland.
39
Fig. 23. Organisational components of Multiklaster
Source: own graphics
Multiklaster is a platform combining business and science representatives, practitioners and theorists, whose
objective is to create innovative ideas arising from the transfer of knowledge, know-how and the
convergence of ideas. Utilizing various sources of knowledge and information, in pair with the approach of
„coopetition" (cooperative competition), brings forward a synergy effect.
The main priority of the cluster is to stimulate and boost the potential and competitiveness of the SMEs
operating within IT and Multimedia sector by integrating business and academic centres, and providing them
with tools and facilities for research and development.
Members of the Multiklaster are highly diversified, not only by region, but also by the services they provide.
Units of the supra-regional partnership operate mostly within the sector of ‘creative industries’ and
entertainment industry. In Fig. 24 below the main fields of expertise are presented.
40
Fig. 24. Main fields of expertise of the Multiklaster members
Source: www.multiklaster.pl
The competencies of the Multiklaster members go beyond the above mentioned areas and also encompass
TV-studios (video clips, advertising, creation of classic and 3D animation including post production),
producers, providers of mobile solutions, computer software for enterprises, sophisticated Internet solutions
including intranet and extranet, publishing companies, consulting and e-learning companies, and interactive
advertising agencies.
West Denmark
Denmark is divided into five regions. The regions have between 0.6 and 1.6 million inhabitants. In terms of
surface, the smallest region, Capital Region of Denmark (Copenhagen area) covers 2,561 square
kilometres, whereas the largest, Central Denmark Region covers 13,142 square kilometres.
41
Central Region Denmark and North Region Denmark have the following strategy in relation to Regional
Development:
•
The regions stimulate regional development through their responsibility for regional development
planning and regional business growth.
•
The regions provide results through cooperation with municipalities, businesses, educational
institutions and other regional actors.
•
The regions work within the areas of education, innovation, business development, tourism and
culture, employment, infrastructure, rural development, nature and the environment in order to
create attractive environments for business, investments, citizens and tourists.
•
The regions have financial means to support regional development and growth initiatives.
As a result of the strategy for Regional Development the two Regions (Central Region Denmark and North
Region Denmark) have initiated a joint media venture named Shareplay. Shareplay’s mission is to take part
of the development of the future media sector. Shareplay will create growth in the business sector and raise
the employment and the creativity in the two regions by indulging companies and institution, who are up to
date with the latest trends, form part of an intersection of network, projects and initiatives, that work in an
international context. In this way, the Regional Development is optimised by an innovative audiovisual sector
working across creativity and technology.
42
With help from Shareplay we have gained a lot of general knowledge about the audiovisual industry in the
two regions. We have used the knowledge to qualify our further qualitative research in Filmby Aarhus, which
will be introduced later in the report.
Shareplay Cluster
It has become a common understanding that creative industries have an increasingly positive impact on the
general economy and accelerates innovation in other areas of business. Enabling the creative industry with
the right mindset and tools to create synergy and nourish cluster development to increase innovation and
productivity should therefore be a primary concern in creating cluster policy. The audiovisual industry in the
Baltic region primarily consists of small and medium sized enterprises with limited capacities of innovation by
own resources.
Shareplay is a joint media venture between Central Region Denmark and North Region Denmark. It is the
most important operator within the audiovisual industry in West Denmark. It is a quiet new initiative that will
create growth in the business sector and raise the employment and the creativity in the two regions by
indulging companies and institution, who are up to date with the latest trends, form part of an intersection of
network, projects and initiatives, that work in an international context.
Shareplay is undertaking a secretarial function and the work is based on actual issues and is divided into
three main categories: strategic development, distribution of the Shareplay Funds and facilitation of network.
Strategic development
43
Shareplay ensures general knowledge of the regions’ work and strategy and will develop the audiovisual
businesses. The aim with this work is among other things to secure a growing and continuous political and
economical support of the efforts made within the field. Furthermore, the secretariat administers and works
to increase the existence of venture capital, to support projects and products that are able to increase the
regional turnover within the field.
Distribution of the Shareplay Funds
Shareplay finances are levelled at projects and activities that develop the cross media field in the two
regions. The secretariat advises users on the application process and undertakes the processing in
connection with applications for the fund.
Foundation and facilitation of network
The Shareplay secretariat is working on establishing a network culture among companies and organizations
within the cross-media work. Structure-wise, Shareplay will function as a network-group of ambitious
thematic network consisting of companies from different businesses and environments.
Clusters in audiovisual/creative industries in Poland and Denmark - empirical
results from the surveys.
A relatively high proportion of companies both in Poland and Denmark do not feel the cluster identity
(Fig. 25). This may either suggest a weak recognition of the cluster within the analysed regions or low
satisfaction with clustering activities and benefits received.
44
Fig. 25. Degree to which companies feel to be part of the audiovisual/creative cluster in region
Source: own survey, PL [n=86], DK [n=114]
The previous result is even more disappointing in view of the fact that more than half of Danish companies
signed any formal cooperation with other firms or institutions active in audiovisual/creative industries. The
same is true for only 22% of Polish companies under investigation (Fig. 26).
Fig. 26. Proportion of companies who entered into a formalised cooperation with other firms, institutions
active in audiovisual/creative industries
Source: own survey, PL [n=86], DK [n=114]
45
Formal cooperation with other entities active in audiovisual/creative industries concerns mainly exchange of
experience (Fig. 27).
Fig. 27. Degree to which companies cooperate in a formal way with other entities active in
audiovisual/creative industries in the region where they are located, in different areas
Source: own survey, PL [n=86], DK [n=114]
Companies in audiovisual/creative industries tend to maintain informal (outside the cluster structure)
relations with other firms in the region (Fig. 28). This suggests that despite a failure in attempts to implement
a top-down initiative, some successful bottom-up activities are undertaken independently.
46
Fig. 28. Maintenance of informal (outside cluster) relations with other firms in region
Source: own survey, PL [n=86], DK [n=114]
In Polish case meetings initiated by one of the partners, events (eg. fair) and social media constitute the
main methods by which informal (outside the cluster structure) relations with other firms in the region are
maintained (Fig. 29). For Danish companies again networking events seem to mean much for clustering
vitality.
Fig. 29. Method of maintenance of informal relations with other firms in region
Source: own survey, PL [n=86], DK [n=114]
As mentioned earlier, for Polish companies geographical boundaries do not restrict companies moving to
another location (another region, another country or abroad). As illustrated in Fig. 30, almost 30% of Polish
companies in audiovisual/creative sectors considered moving to a different location which is quite meaningful
47
and may suggest that other locations are perceived by these companies as better securing their further
growth. And this is twice as much as for Danish companies that are quite reluctant to go abroad.
The companies that consider moving to other locations are mainly from the Łódź province (13 firms). They
think mainly of moving to other EU countries (UK, Ireland for market reasons and Cyprus for tax reasons
were mentioned), the United States or to the East (Russia, Ukraine). For Łódź-based companies the
destination locations in Poland were mainly Warsaw (4 companies) and Kraków. The majority of companies
from the Małopolska province are primarily seeking for larger markets and mention the United States, UK,
the Netherlands abroad and Warsaw in Poland. One company mentioned Slovakia as their destination giving
lower costs of activity as the main reason for that.
Fig. 30. Has company in the recent two years considered moving to a different location (region, country)?
Source: own survey, PL [n=86], DK [n=114]
Taking over employees from other firms in the region is not a common practice in the audiovisual/creative
industries in Poland (Fig. 31). Its scale, however, is lower than it could be expected in a situation where
knowledge and competences are among the most important factors of the company’s competitive position.
48
Fig. 31. Degree to which Polish companies acquired employees from other firms in region over the past 2
years
Source: PL survey [n=86]
The same tendency concerns losses of employees on the account of other firms in the region in Poland
(Fig. 32). Not many jobs were lost as a result of employee flows within the sector. This is perhaps a result of
an early stage of the sector development in Poland. In more mature and saturated economies such as a
Danish one employee flows may pose a serious threat to companies’ future growth as it may appear quite
difficult to acquire employees with suitable skills and competences which these industries demand.
Fig. 32. Degree to which Polish companies lost their employees from other firms in region over the past 2
years
Source: PL survey [n=86]
49
One in four surveyed companies in the audiovisual/creative industries in Denmark experienced either a loss
or acquisition of their employees from other firms in the region over the past 2 years (Fig. 33), which is quite
remarkable giving an evidence of open labour market where labour force moves in and out of companies.
Fig. 33. Degree to which Danish companies acquired or lost employees from other firms in region over the
past 2 years
Source: DK survey [n=114]
Brief conclusions from the cluster-related quantitative research done in Poland
and Denmark
As the worldwide evidence suggests, the audiovisual/creative industries may serve as catalysts of regional
growth and facilitators of the regional restructuring. Clusters may provide a perfect tool with which the growth
is achieved faster and in a more programmed way. Clusters provide an innovative milieu within which the
exchange of knowledge between its actors and innovation is boosted. All this leads to gaining and
maintaining a competitive advantage through increased productivity by enabling better access to skilled
labour, suppliers, institutions, sources of financing, and specialized information.
ƒ
Companies in the audiovisual/creative industries in the examined regions in Poland and in Denmark tend
to maintain rather informal (outside the cluster structure) than formal relations with other firms in the
region. This suggests that despite a failure in attempts to implement a top-down initiative, some
successful bottom-up activities are undertaken independently.
ƒ
A brain drain level in the audiovisual/creative industries seems to be interconnected with the stage of the
industry development. In Denmark being a more mature and saturated economy as compared with the
Polish one, companies are significantly threatened by a loss of employees on the account of their
competitors. Whereas in Poland still a relatively low number of companies seek for lacking knowledge
and competences trying to seize them from their industry rivals.
50
ƒ
The cluster identity of companies is rather low, even in Denmark where every second company signed
any formal cooperation with other firms or institutions active in audiovisual/creative industries. The
research shows that in Poland, where only every fifth company stays in a formal relationship with other
company or a cluster organization, there is a lot of potential for organizing services and cooperation by
cluster organizations, both the existing cluster organizations and new ones. There is a lot of room for
cluster organizations for working on the cluster identity and on improving both the number and the
quality of services deliver to the companies in the cluster in order to tighten relationships between all the
cluster members and to make the system more effective.
ƒ
The cluster organizations in Poland should consider the potential of the network events as the form of
encouraging companies to maintain into relationship with others form the cluster which proves to be
quite effective system in case of companies from Denmark.
ƒ
Local and regional authorities can stimulate the emergence of local clusters, however as the examples
from the Łódź and Małopolska-based audiovisual/creative industries show these can be also bottom-up
initiatives. A critical role of local or regional authorities seems, however, to lie in sustaining the cluster
vitality, especially when the initiatives of the cluster partners are confronted with the lack of finance.
Then, the clustering ties between the partners become looser and the partners lose the cluster identity.
That was very well visible in the case of Mediacluster in Łódź when after the wave of enthusiasm the
cluster identity become to be splitting, with some of the partners trying to establish a new cluster
initiative. From the perspective of local and regional authorities this may suggest a danger to their future
prosperity taking into account that geographical boundaries do not restrict companies to move to more
promising locations.
Qualitative Cluster Research of Filmby Aarhus:
As mentioned before in this report, a qualitative analysis of Filmby Aarhus in Denmark as a cluster in its
beginning was carried out. In the following part we will present our research.
Introduction to Filmby Aarhus
Filmby Aarhus is a business park for companies in the audiovisual industry, located in the second biggest
city of Denmark – Aarhus, in the Central Region Denmark. The buildings cover a total of 12,000 m2, of which
10,000 m2 are used for offices and production facilities for companies. The remaining 2000 m2 represent
two professional film studios and associated production facilities.
Filmby Aarhus is driven by business, political and cultural visions of growth and diversity within the film
industry in the Municipality of Aarhus. Filmby Aarhus is the decentralized entity of the city and regional
51
authorities and funded by them. The objective is that the Aarhus area must be at the forefront of
developments within audiovisual activity.
The mission is to push the development of the audiovisual industries, primarily within moving images. It will
be done by networking and dissemination of knowledge and information and through initiatives to attract new
players. Filmby Aarhus sees this as an important base for cultivating new skills and enhancing
empowerment. Through a wide range of courses and workshops Filmby Aarhus aims to encourage and
continue education and inspiration.
The primary focus is on generating growth and creativity in production for film, television and new media, so
that Aarhus is both internally and externally perceived as a city with big ambitions and opportunities within
the creative cultural industries.
The empathetic research
“A cluster is a geographically proximate group of interconnected companies and associated institutions in a
particular field, linked by commonalities and complementarities.” (Cluster Policy in Europe, Oxford Research
AS, January 2008)
It is somewhat of a paradox that in an increasingly digitalized and globalized world, the notion of local
clusters has gained a lot of interest. However, there is strong quantitative evidence that companies, which
are relatively geographically concentrated, have a higher competitive advantage than companies located in
areas of lower concentration.
So bringing the benefits of increased productivity, innovation and creativity that comes with clustering to the
audiovisual industry is naturally an attractive endeavour. Even more so when taking into account that the
audiovisual industry in the Baltic region primarily consists of small and medium sized enterprises with limited
capacities of innovation by own resources.
Due to these limits of size and in resources, this report will focus on the research areas that best fit
this scenario and primarily address clusters at the level of small business parks or emerging
clusters, as is the case of Filmby Aarhus. Therefore the research will not go into the traditional way of
thinking about clusters, which tends to focus on large industrial clusters, but will instead utilize a more fruitful
and creative worldview, which encompasses the nature of the creative industry that is the audiovisual
industry and the informal and social environment in which it thrives.
Being unique
Michael E. Porter who is thought to be one the founders of the theoretical base of clusters, explained at the
EU Conference on Innovation and Clusters in Stockholm 2008, that clusters cannot be created, but can only
52
be identified and facilitated. In agreement with this many theorists suggests a bottom-up approach for
identifying and facilitating embryonic clusters. Porter also criticized the European countries for not being
unique in their clusters:
“Prosperity [...] of each region comes from being different from the other regions, not from looking the same.
You want the regions to specialize in areas where they can build distinct capability, and distinctive assets,
and deep cluster organizations and so forth, rather than to try to harmoginize or harmonise.” Michael E.
Porter - Clusters, Innovation, and Competitiveness – Stockholm January 22, 2008 (32:10)
Therefore the starting point for this cluster research will be to map and understand the companies within the
emerging cluster through an empathetic approach. Through this the cluster organization will find out what
makes a cluster unique and what kind of challenges and potentials there are for growing the cluster. To
frame and anchor the findings in this research the cluster specific activity model from Reg Lab’s Policyguide
for Cluster development will be used. Reg Lab is a member based "laboratory" for collection, development
and dissemination of good practice in regional economic development. It's Denmarks largest network for
organizations working in regional economic policy - involving state, regions, municipalities, knowledge
institutions, business councils etc. Reg Lab was initiated in 2004 and is a not-for-profit, non-political
association. It is100% financed by member organizations. Reg Lab has more than 120 members including
Danish regions, municipalities, universities, colleges, business advice centres, committed businesses,
regional innovation organizations, companies etc.
The cluster specific activity model lists common activities at different stages within clusters and presents best
practice examples. The model will briefly be described to give the reader an understanding of its potentials
for relating research data on clusters, before going into the specific research activities.
Cluster specific activity model
One of the cluster organization’s foremost concerns is typically to build networks between companies within
the cluster and strengthen the surrounding conditions. Bjarne Jensen from Reg Lab made a model of this
activity and others which seem to repeat themselves in different successful clusters. The activities are placed
according to the maturity level of a cluster. The activities fall into two different categories:
The first category contains the activities and initiatives that the cluster organization on its own has the
responsibility for completing. In this category, tasks as mapping and analyzing the cluster, networking within
the cluster, planning seminars and workshops, creating joint collaboration- and innovation projects, branding
and promoting the cluster are located.
The second category consists of activities and initiatives, where the cluster organization takes on the role as
a catalyser and is responsible for the supervising the development process. Here the cluster companies are
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responsible for the financial aspects, completion and quality of the activities and services, when they are put
in production. The catalyzing activities could e.g. be education aimed at the workforce in the cluster
companies or giving special consultancy offers. Thus the more mature the cluster gets the more
responsibility is given to the cluster companies. The model with the different activities:
Fig
. 34. The model for cluster specific activities and conditions by Bjarne Jensen, Reg Lab.
The activities in the bottom left corner of the model will be visible in many clusters. These are typical
activities that give some immediate results within the companies. The further upwards the activities are
listed, the more complex they are and require that the activities are built upon trust and a common
understanding for the challenges and opportunities. Only when this foundation is in place, is it possible to
develop coherent efforts for cluster directed educations, research and to tailor knowledge centres. If
successful innovative partnerships are established, which entails a broad range of partnerships and large
investments, then you have a cluster, which is capable of creating something unique.
Research activities
Soon after diving into the reality of the companies within Filmby Aarhus it was learned that before talking
about clusters on a larger scale, there needs to be heavily invested in efforts for establishing trust and
common understanding between the companies and in relation to this: creating a shared cluster identity.
This part of the report will thus focus on the core identity of clusters and the surrounding aspects that need to
be established before enjoying the benefits of synergy and cooperation that clusters has the potential to
foster. By using an empathetic approach, which acknowledges that clusters are defined by the human beings
in it and the way they interact, the research gave deep insights into the drivers and barriers for further
developing the cluster of Filmby Aarhus. In the following paragraphs the tools and activities performed during
54
the research phase is described. Please bear in mind that the process has been iterative and that each
activity has been shaped according to the accumulated knowledge done throughout the research.
Fig. 35. The process of research activities illustrated figuratively.
Preliminary planning workshop
In one of the first planning workshops the project group met to work out the main focus areas of the field
studies, interviews and workshops performed. For this the general questionnaire (described in the
beginning), evaluations of Filmby Aarhus and the policy guide from Reg Lab was utilized, which led to the
following general areas:
•
Physical Surroundings
•
Activities
•
Relations
•
Identity
These focus areas made sure that research performed in Filmby Aarhus addressed different levels that
seemed to have an impact on the development of the cluster. The focus areas worked as a framework for
developing the research tools, but they were also flexible enough to incorporate the knowledge gained
during the research.
55
Cluster activity workshop
The first research activity in Filmby Aarhus started by inviting the general manager of Filmby Aarhus and
another co-worker, who takes care of booking of studios, economy and web communication, to a workshop
where they mapped the different cluster activities being performed by the administration of Filmby Aarhus.
The specific cluster activity model from Reg Labs policy guide was used as a basis for the workshop and to
give the participants something to relate to and bring out their knowledge. Their answers gave a glimpse into
the maturity level of the cluster, and the activities performed by the administration – in a current and historic
perspective. It also gave some hints into which activities were missing or which to further develop, for
instance the matchmaking seemed to be unstructured or not even present. This implied investigating the
drivers and barriers for completing the activities at a company level further along in the research.
The second part of the workshop had another agenda, which was focused on the relations between the
administration and companies within Filmby Aarhus. The purpose was to find out who the administration was
in direct contact with and what the nature of their relations was, or whom they did not have any relations to
and the reason why. The participants were given a map of the business’ within Filmby Aarhus, grouped by
industry, and were told to draw in their relations to each company. The finalized mapping of the
administration’s relations was used as a point of departure for asking into which companies had the potential
for being “Cluster Champions”, who could co-ordinate joint projects with other cluster companies, and who
generally were open to think out of the box and had a history with Filmby Aarhus. One of the outcomes of
this activity was a list of potential participants for the interviews.
Company relation mapping
Next step was to map the relations between each individual company in Filmby Aarhus. The relation map
used for the cluster activity workshop was handed over in person to representatives from each company
within Filmby Aarhus. Again, they were asked to fill in their relations to each other and any external relations
they deemed important to the research – it was also possible to fill in their relations to the administration of
Filmby Aarhus if they found it relevant. This gave insights into the different types of relations that bind the
companies together - e.g. physical location, social or professional relationships, and the groupings within
Filmby Aarhus. The gathered information from the companies were put into a matrix, where each company is
listed and the their types of relations to each other has been colour coded. The matrix has been used to gain
further understanding of the overall connections and dynamics of Filmby Aarhus and a deeper understanding
of the answers from the interviews.
Handing over the relation map in person also had another agenda, which was to gain a quick insight into
each individual company, find out who would be relevant to include in the interviews and introducing the
project and the research team.
56
Friday bar workshop
Informal meeting places are at the core for establishing networks, cooperation and innovation in the creative
audiovisual industry. One of the existing after hours informal meeting places in Filmby Aarhus is the Friday
bar. It is a bar-on-wheels which changes location each time the Friday bar is held – currently it is held once a
month. This gives the company an excuse to visit each other’s offices and mingle. The research team
attended the Friday bar to observe the function of it and to further investigate the potential for cooperation
through a workshop involving representatives from the attending companies.
The workshop was called “Friday fantasies” in order to keep with the informal nature of the Friday bar and to
attract companies to participate. A little while into the Friday bar, the research team started headhunting
people for the workshop based on the knowledge gained about each company from handing over the
relation map. Each representative was asked to write three key activities performed by the company on postits, at least three markets, projects or business areas in which they wanted to take their company, and lastly
they were asked to write the barriers or challenges in general or for achieving these new business areas.
The intention was to get as many companies as possible to participate, however the good weather kept
many of the companies outside and the workshop spurred on in-depth conversations about their companies,
Filmby Aarhus and the history between the two. This further gave some information about who could be
relevant to interview and which areas to include in an interview guide.
In regards to investigating whether the Friday bar had the potential for establishing cooperation amongst the
companies, it was a success in spite of the relative low level of participants. Two of the companies, which
mapped their activities, new business areas and challenges, had similar interest in the same business area.
However when confronted with the findings, the companies already knew about each other’s’ interest and
had already planned to work together – but still, this showed that the workshop was able to pick up
similarities between two very different companies and could be used to create new cooperation amongst
companies that do not know about each other’s’ interests.
Another more casual part of the workshop was to get the companies to write down their dreams about
Filmby Aarhus on blue post-its and place them on a wall. This gave further insights into which areas to
address in the research – for instance it was noted that there was a communication breach between the
administration and the companies within Filmby Aarhus and it was suggested that the technical manager
was the only connection between the two.
Semi-structured interviews
Through the mentioned research activities a list of potential participants for the interviews had been created
and selected. The final list contained representatives from various business areas and covered companies
who had been in Filmby Aarhus since the beginning to newcomers who just moved in.
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Using the general focus areas (physical surroundings, activities, relations and identity) and the accumulated
knowledge gained through the research activities, a semi-structured interview guide was created. Besides
using the general interview guide for the interviews, some of the interview guides were tailored to match
participants with specialized knowledge to gain a deeper understanding of these areas. The participants
were interviewed in one of the film studios enabling them to speak freely and would not feel monitored by the
administration of Filmby Aarhus. To help bring the participants into the right mindset and give them
something to relate to while speaking, the relation map which they previously had completed were used and
a map of Filmby Aarhus where they could draw their routes and activities through a typical working day. The
interviews qualified the initial observations and findings from the research activities, and brought some new
insights into perspective – especially concerning the identity and communication within Filmby Aarhus at
different levels.
Cultural probe
After gathering information about the communication between the companies within Filmby Aarhus and the
administration of Filmby Aarhus, it became clear that the primary touching point between the two were the
technical manager. In the practical function he serves in relation to the studios, offices, and hall ways, he met
the companies face to face as the only person on a daily basis. To investigate this further a method called
Cultural Probes was used. The technical manager was therefore equipped with an observation paper where
he was asked to log his informal meetings with the people/companies in Filmby Aarhus, where they met,
what his relation is to the person and what their interactions were about. The probe provided a glimpse into
the social function and identity creating activities the technical manager performs, and how this could be
utilized in the further research. This activity ran simultaneously with the interviews of the selected companies
within Filmby Aarhus.
Observations
Throughout the research activities and meetings with the companies in Filmby Aarhus, observations were
completed of the physicality and social aspects of Filmby Aarhus. These observations were reflected upon in
relation to the current research activity to give an extra layer to the things that were said during the
interviews and workshops. After the interviews an observation activity were done of the hall ways, elevators,
stairways, and outside facilities and documented with notes and pictures. The focus of these observations
was primarily on the physical surroundings and how it dictated the behaviour of the people walking around.
For instance it became clear why the administration seemed unapproachable due to its location and closed
doors.
Systemic mapping: Business Development Service workshops
The gathered research data was used through a series of analysis and discussions to create a number of
overall themes and needs. Systemic mapping with post-its was used to anchor and relate each need or
58
theme to each other, and to give inspiration for suggestions for meeting the needs through business
development services (BDS). The BDS’ were also based on the opportunities and potentials discovered in
the research data. The condensation of the data gives some very specific recommendations for Filmby
Aarhus, but in general some of the thoughts behind them will serve as inspiration for what could be
done elsewhere.
Brief conclusions from the cluster-related qualitative research done in Denmark
ƒ
Repeating Porter’s notion that each cluster should aim at being unique seems to be the case whether
you try to or not due to the people making up the cluster. Therefore it does not make sense trying to
apply generic guidelines for fostering a cluster. This became clear through the research, where a great
deal of history and difference of opinions were uncovered concerning Filmby Aarhus in general, which
turned out to be in the way of moving onwards with fostering the cluster. The case of Filmby Aarhus
can thus give some lessons learned about what needs to be in place in order to move on and
focusing on the cluster on a more strategic and larger scale.
ƒ
Lending an empathetic ear to the people that make up the cluster should be a main priority in order to
establish the foundations on which the cluster can grow. Listening to people within the cluster will
uncover expectations and needs and provide guidelines for managing the cluster and where to direct
your attention on a strategic and policy making level in relation to communication, identity and
social/professional relations. Trust and openness amongst the different stakeholders in a cluster, is at
the core of tying the cluster activities and initiatives together and needs to be in place at the beginning.
The research has brought about some suggestions for Business Development Services that can help
create this foundation and trust within Filmby Aarhus. It is the intention to further develop selected BDS’
in collaboration with the administration of Filmby Aarhus.
ƒ
The cluster specific activity model served as a great tool for understanding what kind of cluster activities
were performed and which could take place in the future, but the sequence seems to be different in view
of the case of Filmby Aarhus, where the crucial part is to define an overall identity. It also seems that
there needs to be more focus in the specific cluster activity model on creating initiatives that ensures
trust and identity instead of hoping that the two will manage itself and thereby neglecting the human
values.
59
Fig. 36. The role of trust, openness and identity in fostering cluster specific activities and conditions.
ƒ
Since the cluster research focused on a smaller scale than what might be called a fully developed
cluster, some aspects such as collaboration to the university and other areas of education and issues
concerning infrastructure surrounding Filmby Aarhus have not been taken into account at this time.
Instead the research aimed at being practical and giving suggestions that are relevant to an
industry, which does not have many resources. The issues raised in this report and Business
Development Services’ concerning trust and identity will most likely be recognized elsewhere as
major barriers for taking the cluster beyond the first step.
60
Chapter 3 - Business development services
for cluster-based companies
This chapter will present a number of Business Development Services (BDS) gained from the research in
Poland and Denmark.
Business development services for Polish companies operating
in the audiovisual/creative industries – results of the quantitative survey
As many as 41.9% of the companies received no funds for investments or projects (Fig. 37). For those who
obtained external funding, EU funds was the most frequent source mentioned (37.2%). Subsidy from non-EU
public funds was mentioned by 15.1% of interviewees. Every ten company used financial help from a bank or
another financial institution.
Fig. 37. Sources of funding of investments or projects.
Source: PL survey [n=86]
The companies supported financially are not fully satisfied with external sources of financing their needs
(Fig. 38). This is perhaps the result of a fast growth realised by such firms where financial backup does not
follow the pace of the growth.
61
Fig. 38. Degree to which external sources of financing satisfied companies' financial needs
Source: PL survey [n=46]
Deficiencies in knowledge and competences concern primarily new digital media and access to capital from
subsidy schemes (Fig. 39). In practically all the fields companies do not feel comfortable with knowledge and
competences they possess. Thus, these gaps show the potential for the emergence and wider provision of
business development services. In Poland more knowledge and training is required primarily in the area of
access to capital from subsidy scheme, technology, and new digital media.
Fig. 39. Degree to which Polish companies need more knowledge and training in different areas
Source: PL survey [n=86]
62
Collaboration with other companies was declared to be the most important factor to the ongoing
development of the company’s competencies in Poland. Proximity to other companies enhances the
possibilities of interaction, hence clustering seems to be of particular importance for companies in the
audiovisual/creative sectors. Although to somewhat a lower degree, but still quite a high proportion of
companies (41.7%) find it important for their ongoing development of competencies to cooperate with
business support organisations (Fig. 40). What also becomes apparent from the survey is the fact that
companies in the audiovisual/creative industries prefer recruitment of competent staff to its development
through training. Nevertheless, training both for company employees (51.2%) and for company management
staff (43.1%) influences significantly the development of companies’ competencies.
Fig. 40. Degree to which different factors are relevant to the ongoing development of the company’s
competencies in Poland
Source: PL survey [n=86]
Business development services for Aarhus-based companies operating
in the audiovisual/creative industries – results of the qualitative study
The business development services for Danish companies operating in the audiovisual/creative industries
were identified on a basis of the cluster research conducted in May 2011 in Filmby Aarhus. Each business
development service is arranged according to an overall topic, with a description of a need and specific
initiatives and suggestions that can fulfill the need. As a result, a catalogue of business development
services was developed that will be further used for the implementation design, and some of these business
development services will be implemented in Filmby Aarhus afterwards.
63
Identity
(1) There is a need for a unique and dynamic identity that companies within Filmby Aarhus can
relate to.
To create a feeling of belongingness within Filmby Aarhus, and to tie activities and initiatives together it is
necessary to create a shared identity. The identity is the color shot through everything and is able to frame
joint activities across different areas. The identity should be unique and recognizable yet has a certain
degree of flexibility for interpretation amongst relevant stakeholders. The current identity of Filmby Aarhus
seems hollow, not clearly defined and lacks attitude, which makes it a breeding ground for misinterpretation
and comparisons with the movie environment in Copenhagen. This turn excludes some of the companies.
-
To meet this need a redefinition of the communication strategy regarding Filmby Aarhus is
suggested. The strategy must clearly and engagingly explain what Filmby Aarhus strives to be
good/best at. It is therefore recommended to continue the communication strategy workshop where
the administration left off and find out what ties the activities and projects within Filmby Aarhus
together. The new identity should point towards the new market conditions and be a guiding light for
the companies within Filmby Aarhus and the rest of Aarhus.
(2) The identity should include the two overall groupings found in Filmby Aarhus.
Companies within Filmby Aarhus can be said to be separated into two groups; the film and media group and
the rest, which included graphical designers, journalists and publishing amongst others. Each group has a
different perspective on what Filmby Aarhus is and whether they feel a part of it.
-
This is part of the reason why it was previously suggested to create a flexible identity which
encompasses both groups, but with respect for their different business areas. It seems that Filmby
Aarhus cross media venture has the potential for tying the two areas together, if it is communicated
and presented in the right manner. If the identity is clearly defined with an attitude which points
towards cross media and the new market conditions and is communicated in a thought-provoking
way they might see the potentials for closer work relations. Another name might also help this
along...
(3) There is a need for public branding of Filmby Aarhus.
The reputation of Filmby Aarhus is that it is a closed environment. Students from the university are either not
aware of its existence or do not feel like it is a place they can drop by. Citizens and companies are not fully
aware of the exist¬ence of Filmby Aarhus. The buildings, hallways and corridor are characterized as lifeless.
The research paints a picture of informal meetings as an important tool for building both professional and
social relationships. To get the public’s attention, social events and initiatives that resonate outside Filmby
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Aarhus is necessary. This can be achieved by through a progressive communication strategy that
incorporates:
-
Open events that changes misconceptions of Filmby Aarhus as a closed environment. E.g. by
creating a Media Exploratorium, where the public can create and tell stories on various platforms.
-
Inviting students from specific educations / creative environments to arrange events in Filmby
Aarhus.
-
Developing activities outside Filmby Aarhus inspired by the concept of Street coffee (coffee sold
from a bike). Why not make a mobile Friday bar that shows the identity of Filmby Aarhus and visits
creative environments in Aarhus and breaks down the physical frames of Filmby Aarhus? Like a
Friday bar-bike that visit certain creative areas of Aarhus and works as a living promotion pillar for
activities in Filmby Aarhus.
-
(Theme) Parties that are bigger and better than anywhere else in Aarhus for the industry. Great
parties seem to be attractive for many companies.
-
Development of unique selling points that will attract citizens – this relates to establishing a unique
identity. The unique selling point could be a lot of things, just as long as it sets Filmby Aarhus apart
from others. It could for instance be to dye the beer in the Friday bar a certain color etc.
-
Placing a cinema in Filmby Aarhus could draw people in. We know that it has been attempted, but
efforts should be made to work around the obstacles that stood in the way.
-
Being better at using existing and planned events in Aarhus such as Festugen and Spotfestival and
see the events as a springboard for creating new projects that fits the event and brands Filmby
Aarhus’ competencies.
Communication
(4) There is a need for hiring a person to manage the communication area.
In general there is a need for an optimized communication amongst the companies, and between the
administration and the companies. The administration has few resources for managing the Filmby Aarhus’
communication area, which is apparent in the research. Through out the communication topic the
suggestions will take the low resources into account, however below is a suggestion to help lift the potential
of the communication activities:
-
The administration should recruit a communication employee to ensure that communication activities
on all platforms are managed on a professional level.
(5) There is a need for an internal communication tool.
The residents are missing a forum to express needs or do promotions, and a forum where the administration
can participate.
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Due to easy access the forum should work on a virtual platform. The platform could simply be a group on
Linkedin, Podio or a possibility to try out a European platform for clusters (www.cluster-collaboration.eu). The
research has shown that the platform should contain:
-
A room for airing opinions.
-
A room for flashing immediate calls for competencies and professional feedback.
-
A wish list for new neighbors/competencies.
-
Information from a noticeable and active administration.
-
An online booking platform of meeting facilities and studios.
(6) There is a need for an online booking platform of meeting rooms and studios.
The need for online booking of facilities are suggested to be integrated on a virtual platform for the
companies within Filmby Aarhus. Companies search for a more smooth booking of studios and meeting
facilities. The reason is that clients may call for a job that need immediate booking afterhours, and the
company cannot be sure that they can book a studio or meeting facility in Filmby Aarhus at that moment,
they might lose their client.
-
An online booking platform of meeting facilities and studios. This will in turn free up time for the
administration to focus on other areas, such as other communication activities.
(7) There is a need for creating optimized newsletters that give information at more levels.
Most companies interviewed know about the newsletter, but it does not make an impact on them. The
content is sometimes overstated and if the newsletter’s heading is film related other companies drops off and
do not read it. The newsletter gives of the impression that it is only related to film, which pushes a large
number of the companies within Filmby Aarhus away. The companies ask for a more down-earth newsletter,
which describes info at all levels such as projects, activities and simple happenings outside Filmby Aarhus:
A proposal from a resident is to create an informal newspaper (not an email). The research points out
elements, which an optimized version of the internal newsletter is suggested to contain:
-
Info/presentations of new residents.
-
Activities within the administration.
-
Decision from above.
-
Activities in and around Filmby Aarhus premises e.g. outlets or mentor workshop.
-
Activities within Shareplay, First Motion, NSSP etc.
-
Viral videos make info more edible.
(8) There is a need for progressive external communication
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Issues concerning identity and contact with the surrounding environment have constantly pervaded the
research. More BDS’ revolves around specific areas concerning this overall need. In general there is a need
to be more progressive and maybe provoking in the branding of Filmby Aarhus. The external communication
should focus on more attractive newsletters or Facebook updates. The administration has started Facebook
fan page for Filmby Aarhus. The page should have a lot more followers if it wants to make an impact and
attract the right people. More life through followers and increased updates from the administration can make
this media more attractive to follow and use.
Following list gathers points from the research that the external communication is proposed to contain.
-
Event/parties.
-
Company profiles and success stories internally as well (and of the smaller companies, not just the
big ones).
-
Promotion of talks within Filmby Aarhus.
-
Inspirational elements like promoting talks/activities and other pertinent news from around the world.
-
Viral videos make info more edible.
Cross media
(9) There is a need to communicate a definition of “Cross Media”.
The interviewed companies do not seem to be familiar with the term Cross Media or have not yet heard a
good definition of it. There are several assumptions about Cross Media and hardly anyone knows about the
Cross Media venture taking place within the administration of Filmby Aarhus.
-
Fuzziness concerning the term Cross Media calls for a down to earth redefinition of the term and
communication of it. One way of doing this is to show it (and don’t tell it). The venture which is called
Shareplay couldbe more practically oriented and in larger scale have Cross Media incorporated in
their communication by conveying news or promoting activities through simple online games, viral
videos, short films etc.
(10)There is a need for a best practice case – show it, don’t tell Cross Media.
Another way to describe and define Cross Media is through a best practice case. Some interviewed
companies feel a shift in market demands due to different media consumption. They are aware of the new
market changes, but they have no knowledge of to change their business. A detailed and inspiring case can
give a picture of Cross Media.
To convince companies to work with Cross Media or just understand the term, development and production
of a best case is suggested. The case should:
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-
Show information of content, collaboration issues and business models.
-
Show that it is possible to create projects with few resources – this will open the eyes of the small
companies and minimize the risk of trying it out.
-
Demonstrate how the process looks like and get around the prejudice that is a very slow process.
-
Define a value stream and provide visible insight in a value chain to inspire companies to cooperate
with other industries.
-
Show where and how to retrieve money in a Cross Media productions.
-
Explain IPR-rights and suggest models for avoiding disagreements.
The case could be formed as an open competition for companies in and around Filmby Aarhus and a
prospective pool of talent in Aarhus. The competition should involve different fields telling the same story. An
initiative like this might boost matchmaking across fields in Filmby Aarhus and the rest of the industry.
The case story can be told and hyped in newsletters and the web. Furthermore it can be a part of Filmby
Aarhus’ identity and branding vision.
(11)There is a need for creating an eye-opener for the Cross Media.
It is the impression that the film environment mostly thinks in traditional film production ways and thereby
fails to come off the edge of innovation and development. They will continue to work the way they do until the
reality of the new markets hits them. This environment must learn to think in new ways. Traditional
presentations on the subject do not work.
-
One proposal is to make Cross Media activities more informal and practical. This could be through
an external inspirator which have can give the recipe for one way of doing a crossmedia project (in
Die Asta). It was mentioned that formal presentations in Filmby Aarhus are insignificant to some
companies.
-
Another proposal is to promote more clearly that Filmby Aarhus focuses on cross media productions.
This will most likely go hand in hand with creating the identity for Filmby Aarhus, which should
inspire the companies to work across industries.
-
A third proposal is to brand Cross Media by creating series of articles and viral videos with
companies that already have taken the new market changes into account – preferably respected
companies that everyone knows, it could e.g. be JA Film. The content should then be pushed out
through news mails and Facebook groups.
-
Another suggestion is to be more provoking in creating eye-openers, for example by creating
videos/articles that describe the “catastrophe” of the new market conditions as if it was already
occurred: “All companies within the audiovisual profession are on the brink of extinction. Here is one
of the few that did survive...”
-
Creating a Cross Media competition that focus’ on interdisciplinary cooperation’s within Filmby
Aarhus could be another way to create eye-openers. The competition could contain a humanitarian
68
element, this might inspire companies to get involved and give them a feeling of doing something
meaningful together. A case with charitable could even gain financial support from other
organizations.
(12)There is a need for informal idea meetings in the administration office with the companies.
It is told by an owner of a one-man company that he has more ideas for cross media projects, but he is
missing the last pieces of the puzzle for realizing them. It is expressed that this is a general issue for more
companies.
The administration staff has knowledge that can link ideas with means and match the company with other
companies/competencies. It is suggested to open up for informal idea meetings at the administration office.
To ensure attention from residents the invitation should be initiated by the administration. An employee from
the administration could send out personal invitations. “Hi. I would like to invite you to a cup of coffee next
week and hear if you have any ideas for new projects. Perhaps you have cross media ideas you have not
carried out. I would like to guide you.”
Further suggestions revolve around developing a physical game to set a frame and facilitate such idea
meetings. With the game companies can play out their ideas, be inspired and consider new aspects that
Shareplay or the new general manager can take into account. Such a game must address areas such as:
-
Coerce the player(s) to think storytelling on other media platforms
-
Point out where the money is
-
Give an outcome of possible matchmaking/ cooperation.
Matchmaking
(13)There is a need to get companies to feel like a part of Filmby Aarhus and to give them an
understanding of each other.
The research shows that knowledge between companies is poor, which is crucial for matchmaking. Some
interviewed companies emphasize that they do not feel like being a part of Filmby Aarhus’ identity and
community. It is told that people are bad at greeting each other in the canteen or in the corridors, and only
few residents are minglers.
-
To make an optimized cluster and thereby create better matchmaking possibilities there should be
initiatives, which creates knowledge between the residents. A suggestion is to create a LinkedIn
profile for Filmby Aarhus. Every company within Filmby Aarhus should be told to add the profile to
their connections. This way the companies can explore each other, but even more interesting is the
69
social-graph-function, where the relations and grouping within Filmby Aarhus can be visualized – it
will be a more effective way of doing the relation of performed in this research. (see appendix 2).
-
Another proposal is to make the faces of the residents visible at certain areas within Filmby Aarhus
e.g. in relation with a virtual welcome screen (cf. “more life and identity” under Physical frames).
(14)There is a need for changing the mentality of the bigger companies towards cooperating more
with the smaller companies.
The relation maps show that the bigger companies have few relations within Filmby Aarhus. It is mentioned
in the interviews that the “big fish” only work with each other and has a very competitive mindset towards
smaller companies.
The Cross Media venture might be a part of the answer of this need. As mentioned in the needs towards an
identity change and in the needs described under Cross Media a mentality change can be a product of a
new identity strategy. Starting and opening the pool of means within Cross Media could kick-start new
cooperations.
It is expressed that informal meetings is favorable when it comes to cooperation and matchmaking.
Therefore it is suggested that the administration puts persisting efforts into drawing the big companies to the
activities in Filmby Aarhus. To further make new relations across the companies – big ones as well as small
ones – it is suggested to investigate which hobbies people have - Filmby Aarhus could start football team or
a floor ball/hockey lunch-team that can bring residents together.
(15)There is a need to create contact to creative environments, students and pool of talent based
around Aarhus.
New potential residents exist outside Filmby Aarhus in creative environments and at various educations.
These up-comings have new knowledge of techniques, methods or ideas to inspire or bring to projects. The
administration has to do activities to get the talents’ attention, through activities as:
-
Active participation at education fairs to attract young talents’ attention from start.
-
Host release parties of relevant productions at for example Kaospiloterne or Filmværkstedet.
-
Buy cheap and targeted advertising space in study magazines to advertise activities and Filmby
Aarhus in general.
-
Invite and motivate the crowd to sign up for newsletters or Facebook group.
(16)There is a wish for adding competencies such as: 3D/animation agencies, graphic companies, a
skillful writer and flash experts into Filmby Aarhus.
70
During the interviews some missing skills within Filmby Aarhus were pointed out. The companies have
wishes for new collaborators, but their thoughts are not heard by the administration. This information is
significant concerning segmentation and building a cluster.
-
The administration should listen to residents needs concerning new competencies. This can happen
through a tool where requests from companies are identified. It is suggested to make a wish list of
suggestions for new companies that should be located in Filmby Aarhus. (cf. “internal
communication tool” under Communication).
Growth
(17)There is a need to boost Filmby Aarhus with inspiration and life.
Interviewed companies said that young people are the way to gain growth through the inspiration and life
they give off, yet Filmby Aarhus is not characterized by having a lot of young people. Companies express a
desire for a greater willingness and desire to invest in young people, rather than to build a mini-Hollywood in
Filmby Aarhus. “We’re a young industry and it is the young who have the new stories and are innovative”. It
is hereby implied that Filmby Aarhus can create a space where media evolves by bringing the pool of talent
into the buildings. This seems to be attractive amongst the interviewed companies and it is also relevant for
Filmby Aarhus to make the young people a part of the value chain within, since they are visible identity
makers.
-
To boost life and inspiration within Filmby Aarhus it is suggested to open a playroom for the pool of
talent and creative young talents. Filmby Aarhus could rebuild a central room and offer an open
transparent space, which lends itself to be a place for outrageous creative activities. The talents
invited to be a part of Filmby Aarhus could be constrained by having a certain age and be giving a
low rent. This playroom can have a potential as a link between the education system and Filmby
Aarhus.
-
Another suggestion is to arrange more activities where young creative talents can spread knowledge
or new techniques. Pecha Kucha is an example of a quick inspirational element.
(18)There is a need to open up the pool of talent through joint projects.
It was learned that the “old boys” in the business want to play with the young and the wild talents. But it is
said to be difficult to get in contact with the young, as there is no natural touch-point between them, therefore
an obvious touch-point can be joint projects.
-
Filmværkstedet (The Film Workshop) could be a link to the pool of talent. It is emphasized and
questioned why the relation with Filmværkstedet is not being utilized further and it has been
suggested to refine the cooperation with Filmværkstedet by being an active initiator for joint
projects.. E.g. mention Filmværkstedet in relation to cheap labour, when the studios are rented and
71
productions take place. It is a suggestion to set the administration in a matchmaking role, where
ideas from residents are collected and matched with other companies and young competencies in
close cooperation with Filmværkstedet.
(19)There is a need for having administration motivate smaller companies to be ambitious.
An interview points out two types of residents; companies and freelancers. First mentioned is described as
ambitious and with a will and visions that extend beyond being self-supporting. These two perspectives can
explain a lack in cooperation between one-man companies and bigger companies. If the bigger companies
do not get the feeling that the smaller companies or freelancers are ambitious then they will not establish
professional or social relations with them. It is seen as the role of the administration to motivate smaller
companies to become more ambitious and give them perspectives and visions for their companies.
This can be carried out by:
-
Making small companies realize that together they can move boundaries. The Cross Media game
could be a tool (cf. “idea meetings” under Cross Media).
-
Promoting small company success stories to boost their self-confidence.
-
Inviting new residents to a welcome meeting where visions and goals for their companies are
described. (cf. “improve the first contact” under Communication).
Brief conclusions
ƒ
The case of Filmby Aarhus as an example of a cluster organisation gathering companies representing
the audiovideo/ creative industry can give some lessons learned about what needs to be in place in
order to move on and focusing on the cluster on a more strategic and larger scale. This also may be
relevant to the clusters which gather companies within the science-technology parks and incubators,
which the Filmby Aarhus in Denmark is, too.
ƒ
In many other regions of the Baltic States the audiovideo/creative industry are the sectors of the
economy developed mainly by the small and medium size companies which do not have many
resources. Therefore it is assumed that many other cluster organizations located elsewhere may be on
the same stage of development as the cluster in Aarhus in Denmark. They also may be searching their
own way of faster development and they may look at the experience and research made in Denmark
and in Poland as at the catalogue of the potential business development services, the implementation of
which may be important or even crucial to make their cluster organizations, formal and informal ones, as
well as the companies develop in a more effective way. Even more advanced or younger than Filmby
72
Aarhus cluster organizations may use the results of the research made in Aarhus as the way of
identifying the problems they may face sooner or later and as the catalogue of solutions of the problems.
ƒ
The issues raised in this report and Business Development Services concerning trust and identity in the
cluster organizations will most likely be recognized elsewhere as major barriers for taking the cluster
beyond the first step.
ƒ
Also other fields like funding for the companies, matchmaking with other companies and organizations,
training provided to the companies team member and to the companies managers, were identified in this
research as most important factors of determining the development of businesses in the
audiovideo/creative industries and the portfolio of the business development services built and easily
delivered by the cluster leaders, by the business support organizations, by the universities and by the
local and regional authorities were found most important factors determining further development of
these sectors.
73
General conclusions and recommendations
The conclusions and recommendations have been classified according to the type of beneficiaries that may
potentially use the findings of the study and implement them in their strategic and operational activities.
These groups of potential beneficiaries include: local and regional authorities, universities, R&D institutions
and business support organizations and cluster animators and managers.
Conclusions and recommendations for local and regional authorities
The main combined conclusions and recommendations particularly relevant to local and regional authorities
are as follows:
(1) The audiovisual/creative industries offer a high potential of growth for their companies and therefore for
economic and social vitality of the region providing foundations for prospective growth of the region. As
companies operating in these sectors generate a lot of innovative products and services and are open
for cross-regional and international cooperation, they may be good vehicles to impart dynamism on the
economic development of the region.
(2) Their importance is all the more significant for such regions as the Łódź province in Poland that relied
very much on traditional industries and need nowadays the restructuring of its economy’s structure. It is
worth highlighting that this potential has been noticed by local and regional authorities in the Łódź
province as results from the analysis that was made within the study by means of individual in-depth
interviews with policy makers on the city’s and region’s level and seen through the prism of their
activities supporting these industries). On the other hand, other regions in Poland – the Małopolska
province is the example as well as other regions in Baltic States – the Aarhus Region in Denmark is the
example, as well as many others worldwide find the audiovideo/creative industries worth paying special
attention and support from municipal and/or regional authorities.
(3) The audiovisual/creative industries require a dedicated, sectoral policy that would make them an
integral part of local, regional and even national economies. This has not been fully achieved yet as
there is no specific policy towards audiovisual/creative industries, although - as some initiatives show these industries are of interest of local, regional and national policies (being for instance subject of a
74
regional study carried out in 2009 in the Łódź Region in Poland, selected among a few other sectors
important for the region).
(4) The systematic collection of data and information on the development of the audiovisual/creative
industries is needed to support municipal or regional policy formulation and assessment of their
implementation. Their regional or national impact has not been measured yet. Such analysis – if
undertaken - should also reflect regional spillovers (an impact on other sectors of economy) that add up
to its direct impact.
(5) The rapid growth of companies within the audiovisual/creative industries needs to be supported by
financial tools (which is one of the most desired business support services from the perspective of
companies alone) securing the financial side of the innovation-oriented business initiatives in the
audiovisual/creative industries.
(6) As concentration or clustering, understood as both formal and informal initiatives gives businesses an
advantage over more isolated competitor, cluster initiatives should also get the financial support from
the city’s or a region’s policy makers. Clusters are found to be an efficient tool enabling companies to
focus on what they know and do best; they need not do things they do not do well. Firms in clusters can
also benefit from synergy. Companies able to operate more or less as a system can use their resources
more efficiently and collectively produce more than the sum of their individual outputs.
(7) In view of a continuous search for innovations, the financial support need not necessarily has to be
provided directly, and instead could take the form of subsidies to R&D collaboration with R&D
institutions.
Conclusions and recommendations for universities, R&D institutions
and business support organizations
The main combined conclusions and recommendations particularly relevant to universities, R&D institutions
and business support organizations are as follows:
(1) The rapid pace of growth of the companies in the audiovisual/creative industries results in a low level of
confidence about knowledge and competences they possess which is declared to concern a wide range
of business-related knowledge and competences. These competence and knowledge gaps show the
potential for the emergence and wider provision of business development services. In Poland more
knowledge and training is required particularly in the area of access to capital from subsidy scheme,
75
technology, and new digital media. Potentially, such services can be provided both by business support
organizations offering training to company’s employees and managers and higher education institutions
and offered for instance in the form of a post-diploma study. There is a room especially for these
universities and R&D institutes that are members of the cluster initiatives together with the companies.
The gap between the companies’ needs for training and innovation and other business development
service, and the chances to meet the need by offering adequate services by universities, to large extent
depends on their ability to adjust their programs or just build new ones to very dynamic, innovative and
demanding companies. Some of the business development services needed by business entities are
identified and presented in this report.
(2) Although the companies undervalue the issues of the effective protection of their intellectual property
rights, some of them have already gained negative experience. This provides some space for offering
tailored-made training courses and advisory services (designed for employees of companies operating
in the audiovisual/creative industries) on IPR. This should likely encourage small enterprises and
individuals operating in the audiovisual/creative industries to develop new ideas responding to the
challenges of the new digitization era.
(3) As the study results revealed, companies operating in the audiovisual/creative industries are open to
collaboration with third parties. This combined with a strong innovation orientation of companies leaves
a space for R&D collaboration with universities and R&D institutions. The only problem in taking up this
collaboration is that companies are not aware of what they can achieve from such entities. This requires
from universities and R&D institutions a good communication of their offer tailored to specific needs of
companies in the audiovisual/creative industries. It is recommended that the offer might be consulted or
tested within the cluster initiatives, where the university or R&D institutes are members together with the
companies. The cluster initiatives should be the platforms for easier communication between these
groups, which is especially recommended to universities/R&D centers which may have easier access to
the groups of companies through the cluster leaders/cluster administrators.
Conclusions and recommendations for cluster animators and managers
The success of cluster initiatives depends largely on the ability to effectively develop interaction between
people who come from different backgrounds (economic environment, scientific, government), with different
organizational cultures (centralized, decentralized, traditional and innovative) and having different ideas
about the future. This is even more difficult if we consider the fact that human reactions are often the result of
intuitive, subjective and emotional assessments undertaken at one moment in time.
76
As an in-depth analysis of the cluster initiative in Aarhus Region in Denmark (based on the quantitative
research, discussions and observations of the companies being members of this cluster/technology park)
and the analysis of the evolution of the cluster initiative in the Łódź Region in Poland (based on discussions
with the cluster’s stakeholders and animators after a few years of the cluster initiative existence) showed,
crucial prerequisites for the successful implementation of the cluster initiative can be summarized as follows:
ƒ
Achievement of a shared vision among the cluster participants and consensus about specific goals
related to vision and mission and ways to achieve them.
ƒ
ƒ
Consideration to the possibly highest degree different expectations of various stakeholders.
Clear specification of skills, competencies, knowledge and infrastructure that different actors can offer to
others.
ƒ
Awareness of how to effectively reach out to strategic resources (information, capital, people,
knowledge, services) possessed by other actors within the cluster.
ƒ
Clear specification of possible gains (e.g. lower manufacturing costs of products and services, lower
implementation costs, increased revenues, ability to combine innovative solutions as a result of
cooperation within the cluster etc.).
ƒ
ƒ
Commitment of key actors in the implementation of strategic cluster action.
Reliance on a limited group of entities or persons with unique skills, competences and knowledge in the
implementation of the cluster.
ƒ
ƒ
ƒ
Trust between different actors.
Identification of possible bottlenecks that need to be avoided or neutralized.
Working out the proper reasons for companies and universities and business support institutions for
feeling identity with clusters initiatives, by showing them possibilities and helping them to formulate the
projects and other reasons for cooperating. The continued dialogue needs to be maintained by the
clusters leaders or cluster administrators.
ƒ
A good flow of information which should support interactions between different actors.
For a part, these prerequisites are quite universal and could be used by any audiovisual/creative cluster
anywhere in the world. But some of the recommendations may be of special importance and meaning for
countries such as Poland who have not had a long history of a market-driven economy.
The list of recommendations specific for the administration of the cluster in Aarhus in Denmark, can serve as
a list of more universal recommendations for other clusters anywhere, especially for these cluster initiatives
whose leaders take care for high-quality end efficient relations developed between all the cluster participants
77
and who feel they should monitor their operations continuously, identify problems and implement best
solutions.
Therefore, we believe they are more easily adaptable to other Baltic economies such as that of Estonia,
Latvia and Lithuania, and others which may bring an added value to the Baltic region prosperity.
The findings of the study with its conclusions and recommendations will be implemented in practice
by the institution which made the research in two regions in Denmark and in two regions in Poland.
ƒ
The Filmby Aarhus from Aarhus, Denmark will examine the results of the study first and foremost for
their own organization which operates as a cluster initiative/technology park. The Filmby Aarhus will
develop the implementation plan of the recommendations. The results of the implementation will
examined and presented in Spring 2012.
ƒ
In Poland - the Innovation Center - High-Tech Acceleratpr the University of Lodz Foundation from
Lodz, which is the member of the Lodz Media Cluster located in the city of Lodz, will present the
results in the form of a study report to the chief managers of the existing and emerging cluster
initiatives in the Łódź province and Małopolska province in Poland. Depending on their interest, the
recommendations will be discussed and hopefully some recommendations will be implemented,
which will be monitored and reported in Spring 2012, too.
78
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Netography
www.audiowizualni.pl
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81
Index of figures
Fig. 1. The value chain – example of a film industry ....................................................................................... 13
Fig. 2. The constructs of the business model.................................................................................................. 17
Fig. 3. Customer-based revenue models ........................................................................................................ 18
Fig. 4. Third-party supported revenue models. ............................................................................................... 19
Fig. 5. Position of company within value chain. .............................................................................................. 24
Fig. 6. Degree to which company's products are developed for cross media channels. ................................ 25
Fig. 7. Degree to which companies need new competences to be able to incorporate new/alternative media
channels. ......................................................................................................................................................... 26
Fig. 8. Degree to which company is able to attract competent employees..................................................... 26
Fig. 9. Degree to which various factors have an impact on the company’s competitiveness ......................... 27
Fig. 10. Has company ever lost the possibility to introduce a business idea or some revenues as a result of
failure in protection of intellectual property rights?.......................................................................................... 28
Fig. 11. Sales performance over the past 2 years. ......................................................................................... 28
Fig. 12. Major source of companies’ sales growth over the past 2 years ....................................................... 29
Fig. 13. Predictions about sales performance for next 2 years. ...................................................................... 29
Fig. 14. Predictions about sales of companies' product/services.................................................................... 30
Fig. 15. Presence on international markets..................................................................................................... 31
Fig. 16. Degree of use of different forms of promotion.................................................................................... 31
Fig. 17. New product / service development over the past 2 years. ............................................................... 32
Fig. 18. Method of product/service development over the past 2 years. ........................................................ 32
Fig. 19. Development of new production processes over the past 2 years. ................................................... 33
Fig. 20. Method of process development over the past 2 years ..................................................................... 33
Fig. 21. Łódź and Małopolska provinces, Poland............................................................................................ 37
Fig. 22. Organisational components of the Lodz Media Cluster .................................................................... 38
Fig. 23. Organisational components of Multiklaster ........................................................................................ 40
Fig. 24. Main fields of expertise of the Multiklaster members ......................................................................... 41
82
Fig. 25. Degree to which companies feel to be part of the audiovisual/creative cluster in region .................. 45
Fig. 26. Proportion of companies who entered into a formalised cooperation with other firms, institutions
active in audiovisual/creative industries .......................................................................................................... 45
Fig. 27. Degree to which companies cooperate in a formal way with other entities active in
audiovisual/creative industries in the region where they are located, in different areas................................. 46
Fig. 28. Maintenance of informal (outside cluster) relations with other firms in region ................................... 47
Fig. 29. Method of maintenance of informal relations with other firms in region............................................. 47
Fig. 30. Has company in the recent two years considered moving to a different location (region, country)?. 48
Fig. 31. Degree to which Polish companies acquired employees from other firms in region over the past 2
years ................................................................................................................................................................ 49
Fig. 32. Degree to which Polish companies lost their employees from other firms in region over the past 2
years ................................................................................................................................................................ 49
Fig. 33. Degree to which Danish companies acquired or lost employees from other firms in region over the
past 2 years ..................................................................................................................................................... 50
Fig. 34. The model for cluster specific activities and conditions by Bjarne Jensen, Reg Lab......................... 54
Fig. 35. The process of research activities illustrated figuratively. .................................................................. 55
Fig. 36. The role of trust, openness and identity in fostering cluster specific activities and conditions. ......... 60
Fig. 37. Sources of funding of investments or projects. .................................................................................. 61
Fig. 38. Degree to which external sources of financing satisfied companies' financial needs........................ 62
Fig. 39. Degree to which Polish companies need more knowledge and training in different areas.................. 1
Fig. 40. Degree to which different factors are relevant to the ongoing development of the company’s
competencies in Poland .................................................................................................................................. 63
Fig. 41. Location of the Polish respondents .................................................................................................... 85
Fig. 42. Primary business area * ..................................................................................................................... 85
Fig. 43. Size of employment ............................................................................................................................ 86
Fig. 44. Educational background of staff ......................................................................................................... 86
Fig. 45. Polish companies’ turnover in 2010 ................................................................................................... 87
Fig. 46. Proportion of Polish companies’ turnover generated in 2010 from sales in different markets........... 87
Fig. 47. Primary business area* ...................................................................................................................... 88
83
Appendix 1
Characteristics of research samples
Poland
The quantitative study was conducted between February and May 2011 primarily in two Polish regions: the
Lodz province and Małopolska province. The entire study process was divided into two stages.
During the first stage most efforts were placed on the selection of respondents that would be engaged in
business activities run in the audiovisual/creative industries in the Łódź province (Fig. 1). With this aim in
mind the business support organisations were contacted (among others Łódź Film Commission, The Łódź
Media Cluster, Arterion – Technological Incubator in Łódź, Purpose – the Łódź magazine dedicated to
culture and entrepreneurship in culture) and local and regional authorities in the Łódź Region – the Łódź City
Council and the Marshal’s Office being the regional authority, to get their support for the study. They
provided us with the databases of their members and, in some cases, with the letters of support. This
enabled a better start for collecting information on firms active in the audiovisual/creative industries. The
collection of contact data of potential respondents was supplemented with a further web search, especially
on the web pages of the organisations gathering companies and operation on the regional level or on the
national
level,
such
as
www.audiowizualni.pl,
www.kipa.pl,
www.interaktywnie.com,
www.pkt.pl,
www.interaktywne.info, www.pf.pl, www.odi.pl.
The mode of conduct to collect the contact data of potential respondents in the Małopolska province was
similar. The business support organisations we got in touch with in the Małopolska province included Kraków
Film Commission, Multiklaster - The Cluster of Multimedia and Information Systems, Multimedia City
Technology Park, Kraków Technology Park, Inret – Culture and Free Time Cluster, Smit and Smit –
Afterwork Business Company. Finally about 300 companies were selected to whom the survey questionnaire
was sent.
The survey method adopted was computer-assisted web interviewing (CAWI). The survey was preceded
with a pilot questionnaire to ensure the right understanding of the questionnaire among the respondents.
After e-mailing and telephoning activities we got answers from 86 firms.
Characteristics of respondents
The majority of respondents originated in the Łódź province (Fig. 41). The share of the respondents from the
Małopolska province was almost 40% and there were also a few respondents located in other provinces
84
(Śląskie, Dolnośląskie, Warmińsko-Mazurskie) having some business ties with companies from the main
analysed regions.
Fig. 41. Location of the Polish respondents
Source: PL survey [n=86]
The sample of respondents represented a wide coverage of different areas of activities in audiovisual/
creative industries (Fig. 42). Almost half of companies were active in advertising (46.5%), whereas one in
three companies indicated other film production (33.7%), communication and public relations (32.6%),
computer applications/ new Internet solutions (30.2%), animation, graphics (30.2%) and other (30.2%).
Fig. 42. Primary business area *
Source: PL survey [n=86]. * Companies could indicate more than one business area
85
Companies in the audiovisual/creative industries act as virtual organizations mobilizing (human) resources
when needed. The average full-time employment amounts to 23.4 employees. On average 10.3 persons
annually get their job in such companies as project employees and the same number of persons cooperate
as freelancers (Fig. 43).
Fig. 43. Size of employment
Source: PL survey [n=86]
The audiovisual/creative industries attract mainly highly educated people with tertiary education (Fig. 44).
This provides an argument why these industries are more likely to reside in larger cities with better education
services.
Fig. 44. Educational background of staff
Source: PL survey [n=86]
86
Almost half of companies generated in 2010 turnover not exceeding 500,000 PLN (ca. 125,000 euro).
However, the proportion of companies with quite a remarkable turnover of more than 40 million PLN (ca. 10
million euro) was also high (Fig. 45). That shows a great divide within these industries with quite many
(mostly one-man firms) hardly making ends meet if this is the only source of revenue for such individuals and
as many companies doing very well.
Fig. 45. Polish companies’ turnover in 2010
Source: PL survey [n=86]
The majority of companies are neither bound to local nor regional markets, as many of them run their
activities domestically or internationally (Fig. 46). This is quite typical for knowledge-based economy where
geographical boundaries do not limit company’s activities.
Fig. 46. Proportion of Polish companies’ turnover generated in 2010 from sales in different markets
Source: PL survey [n=86]
87
West Denmark
The Danish part of this research is divided in two parts: a quantitative study of the audiovisual industry in
Central Region Denmark and North Region Denmark, and a qualitative analysis of Filmby Aarhus as a
cluster in its very beginning.
Quantitative research
The quantitative research took place from January to March 2011 and we pointed our questionnaire to 635
companies located in two regions mentioned above. We used the result of the survey to gain a general
knowledge about the current situation of the audiovisual industry in West Denmark.
Characteristics of respondents
The survey was pointed to 635 companies in Central Region Denmark and North Region Denmark. The
sample of respondents represented a wide coverage of different areas of activities (Fig. 47). Advertising and
PR & Communication are the most common activities, but computer games, television, film production,
photography, audio, mobile applications and storytelling are well-represented.
Fig. 47. Primary business area*
Source DK survey. *Companies could indicate more than one business area.
88
Appendix 2
List of respondents in Poland
Łódź province
Agencja interaktywna ARSIT
Anagram Film
ANIMA-POL sp. z o.o.
Atom Media Interaktywne
Borneo Studio Irmina Konopka
PHU BRUTUS FILM
CorreStudio - Jadwiga Tryzno
Digital One Consulting sp. z o.o.
Done Robert Papis
E-DEAL Spółka Jawna
Eithel Paweł Kupper
Ericpol Telecom
evangelist
"Fot. M. Dąbrowski" Marcin Dąbrowski
Fundacja Filmowa Se-ma-for
HD House
Inovatica Bogumił Zięba
Kamikaze Sp. z o.o.
Krakatau spółka z o.o
Liber Novus
Listonic Sp. z o.o.
Łódzkie Centrum FIlmowe
MakoLab SA
marigold
MARTENTI Sp. z o.o.
MEDIALAB
MK-FILM
MobileMS
MOSQI.TO
Mtec
Muddy Hill Productions
Mywebsite Piotr Ulacha
NaNo FX Studios
www.arsit.pl
www.animapol.pl
www.atom.lodz.pl
www.borneostudio.pl
www.brutusfilm.com.pl
www.digitalone.pl
done.pl
www.eithel.pl
www.ericpol.pl
www.evangelist.pl
www.fotmdabrowski.pl
www.se-ma-for.com
hdhouse.eu
www.inovatica.pl
www.kamikaze.com.pl
www.libernovus.pl
listonic.com
www.lcf.pl
www.makolab.pl
www.marigold.com.pl
www.martenti.com.pl
www.medialab.pl
www.mk-film.com
mobilems.pl
www.mosqi.to
mtec.net.pl
www.muddyhill.com
www.mywebsite.pl
www.nanofxstudios.com
89
POLKADOT
Poza i Styl A&A Gierakowscy
Prozac Studio
"P&B" FINANSE Bernard Przybyła
RENDER 305 S.C. Jakub Boś, Sławomir Goleniak
Rograf
Sfera
SMart House Media
studio PRowokacja Agencja PUblic Relations
Super Project s.c.
Synkro
wallphotex
WuWu
ŻARÓWKA PR I MARKETING
www.polkadot.com.pl
www.pozaistyl.pl
www.prozacstudio.com
rograf.pl
studioprowokacja.pl
superproject.pl
synkro.pl
www.wallphotex.com
www.wuwu.com.pl
zarowkamarketing.pl
Małopolska province
Afilm
Appetite Production
ARUNA PRODUCTION
Bereś & Baron Media Productions
Blue Paprica sp. z o.o.
CineRental
cinerental
Eura7 sp. z o.o.
Fabryka Sztuki
FILAM ART PRODUCTION
Film Polska Productions sp. z o.o.
Fundacja Ars Nominem
GECKO Media
Gerafik
IGLOO
Ivision.pl
Janusz Bulanda firma MATATU
Kravviec
KIJORA Anna Gawlita
Krzysztof Stawowczyk Dragon Film
Multimedia Capital Group S.A.
On Production
OperatorKamery.pl
P.H.U. NUEVE
www.afilm.pl
www.appetiteproduction.com
www.aruna.com.pl
www.beresbaron.com
www.bluepaprica.com
www.cinerental.pl
www.eura7.com
www.fabrykasztuki.org
www.smit.com.pl
www.gecko.com.pl
gerafik.pl
ivision.pl
www.tomaszwolski.com
www.onproduction.pl
www.operatorkamery.pl
90
PB TEAM PIOTR BIEDROŃ
Promiss
Quest Agency Sp. z o.o.
SATUS Venture sp. z o.o.
Smit i Smit Consulting
Smultron Agencja Interaktywna
sodigital sp. z o.o.
SuperUltra
Szkoła Kaskaderów Filmowych
www.pbteam.pl
www.promiss.krakow.pl
www.questagency.pl
www.satus.pl
www.smit.com.pl
www.smultron.pl
www.superultra.pl
www.szkolakaskaderow.pl
Other provinces
Cinetica
DATURA STUDIO
LD studio Dariusz Lech
TaxNet Sp. z o.o.
cinetica.pl
www.daturastudio.pl
91
Appendix 3
Cluster members
Mediaklaster
Agencja AVA
Agencja Pro Cinema
Akademia Humanistyczno-Ekonomiczna w Łodzi (Academy of Humanities and Economics in Łódź)
Akademia Muzyczna w Łodzi (Music Academy in Łódź)
AMG.net S.A.
Anima-Pol Sp. z o.o.
Arkadia
Camerimage Festival
Centrum Innowacji - Akcelerator Technologii Fundacja Uniwersytetu Łódzkiego (High Tech
Accelerator Innovation Center University of Lodz Foundation)
Comarch S.A.
Digital Cinema Polska Sp. z o.o.
Digital One Sp. z o.o.
Exall Sp. z o.o.
Fabryka Mediów Sp. z o.o.
Fabryka Sztuki
Filmoteka Narodowa (National Film Archive)
Hi-Res
Inkubator Technologiczny ARTERION (Technology Incubator ARTERION)
Instytut Europejski (European Institute)
Kinekspert Sp.j.
Logos Sp. z o.o.
Łódzka Agencja Rozwoju Regionalnego S.A. (Lodz Agency for Regional Development)
Łódź Art Center
Łódzka Izba Przemysłowo Handlowa (Łódź Chamber of Commerce and Trade)
Łódzki Urząd Wojewódzki (Łódź Voivodship Office)
Łódzkie Centrum Filmowe (Łódź Film Centre)
Łódzki Regionalny Park Naukowo-Technologiczny Sp. z o.o. (Łódź Regional Park of Science and
Technology - Technopark)
MakoLab MiK Sopek S.J.
Marta TV & Film
Media Desk Polska
92
Mediaschool Festival
Mediatravel Festival
Międzynarodowe Targi Łódzkie Sp. z o.o. (Lodz International Fair)
MOMINT
MOSQI.TO
Muzeum Kinematografii (Film Museum)
Młodzieżowa Akademia Filmowa (Youth Film Academy)
Opus-Film Sp. z o.o.
Politechnika Łódzka (Technical University of Lodz)
Polski Instytut Sztuki Filmowej (Polish Film Institute)
Purpose – Przedsiębiorczość w Kulturze (Purpose – Entrepreneurship in Culture)
PWSFTViT im. L. Schillera (Leon Schiller Polish National Film, Television and Theater School)
ReAnimacja Festival
Se-ma-for Sp. z o.o.
SFeRa modern media solutions
Signa Sp. z o.o.
Stowarzyszenie Komedia Łódzka
Stowarzyszenie Pro Cinema
Stowarzyszenie Łódź Filmowa
Studio Dźwiękowe FONOGRAF
Studio Filmowe Index
Toya Sp z o.o.
TVP S.A. Oddział Terenowy w Łodzi (TVP S.A. Lodz Branch)
Uniwersytet Łódzki (University of Lodz)
Urząd Marszałkowski w Łodzi (Marshal’s Office in Łódź)
Urząd Miasta Łodzi (Łódź City Council)
Wytwórnia Filmów Oświatowych
Wyższa Szkoła Pedagogiczna w Łodzi (Pedagocical University in Łódź)
Multiklaster
12GA
4Planet Media
4 fun tv
adMobile
ALFA
Akademickie Inkubatory Przedsiębiorczości (Academic Business Incubators)
ASIT
Banana Split
DALMA Systemy Informatyczne
93
Dog Film
Elektris
Empathy Interactive
Enzo
Excelo
Fundacja Ars Nominem
Galactica
Global Business Solutions
House of Skills
hyperCREW
Icsolutions
Ideo
Interdyscyplinarne Centrum Modelowania Matematycznego i Komputerowego (Interdisciplinary
Centre for Mathematical and Computational Modelling)
IQS
i3D
Jagiellońskie Centrum Innowacji Sp. z o.o. (Jagiellonian Innovation Center)
Javatech
Kobiety.pl
Lightcraft
Life Science Cluster Krakow
Looksoft
Małopolska Agencja Rozwoju Regionalnego S.A. (Małopolska Agency for Regional Development)
Maris.pl
Marketing przy Kawie
Media Point Group
Mediapolis
Mellerist
Miasteczko Multimedialne Spółka z o.o.
Mobile Experts Sp. z o.o.
MoCoHub Studio R.D.F.
Naive films
Neomedia
NetMark
Netobiekt
Newitech
Novitus SA
Optisystem
Phonesat
Plagiat.pl
94
podatki.pl
QuadroMEDIA
Sądecka Agencja Rozwoju Regionalnego S.A. (Sądecka Agency for Regional Development)
Simple frame
Stopklatka
Studio Kropka
Tarnowska Agencja Rozwoju Regionalnego (Tarnów Agency for Regional Development)
techVenture
TheBook.pl
Tritech System Technology
Urząd Miasta Nowego Sącza (City Council of Nowy Sącz)
Wema
Wyższa Szkoła Biznesu - National-Louis University
95