[Sydney] X Media | Lab | Conference Wednesday 11 June 2003 - part 1

Organiser Brendan Harkin gave his digital media conference the 'Cross' Media tag, because 'New' media just doesn't cut it anymore.

You can call it what you like - but be careful, because when we called digital media 'New' at the end of last century, a whole lot of us got hurt.

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VRML pioneer Mark Pesce has been riffing on the pleasure and pain of telepresence for years now, so it wasn't surprising that his big message to Xmedia-heads was to have fun with technology and _get out there_.

Pesce suggested that 'Novelty appears to be the best guarantee of success,' in digital media: 'Australians have created a disproportionate share of inventions in the last century. . . so take that creativity and put it into interactivity. . . I know that after the DotCom explosion we're afraid of hyperbole - but don't afraid of a little hype.'

Pesce's latest novelty item is a large plastic brick with LEDs inside called the BRIXEL ('a cross between a brick and a pixel'). The technology is still being worked on, so we don't know its final shape yet, but it probably won't be curved, like the Hypersurface  _hyped_ by Stephen Perrella.

[Still, it looks neat and workable. And I want a bathroom wall built from it.]

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Chris Atkins, a partner in the Sydney office of Accenture, warned that we need to give our audiences time to absorb media - especially if we're going to make money from them.

'I don't think interactivity in digital media is everything,' he said, 'I think passive media is important. Mass media is important for the commercial world... and the pricing strategies currently work.'

But if its interactivity you want, then Atkins says game consoles will increase their value - especially as multi-use devices - when they're online.

He's also tipping the portal model for continued success ('though it won't be Yahoo or Google'), especially as more people connect to broadband content and services, but he's not sure if the audience will pay for content.

[Ouch. You'll pay for magazines. . . but would you pay for pure digital content that doesn't come in a physical package?]

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Tom Kennedy, MD of Brainwaave Interactive is also concerned about the audience not wanting to pay for content ('Content is NOT free - it has a cost.') and he's equally sceptical about interactive TV.

Right now, as he rightly pointed out, we're getting nothing more than 'test' pattern for digital TV. And the question we're faced with, he mused, is whether we want to sacrifice high definition TV for interactivity?

Hell, he'd know better than most, having produced interactive content for an early Telstra attempt to flog iTV to the masses, and discovered the hard way that the audience wasn't ready.

Besides, as far as Kennedy is concerned, 'Innovation rarely happens at the centre of new media anyway - it happens outside.'

His list of challenges to iTV included: viewer fatigue; poor device take-up; stalled investment; competition from other devices; and the fragmentation of the audience disrupting traditional revenue models.

[Damn. I felt bummed after that. He might be right, but it doesn't make swallowing the blue pill any easier.]

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Cue. . . Roger Buckeridge, co-founder of venture capital management company Allen and Buckeridge. A man who will show you the money if you have a great business plan.

[Remembering, of course, that VC investments are for projects that can grow: they can't be used to fund an entire business. Gone are the days of DotCom startups spunking millions up the wall - if you can't show you have a sustainable business you're nixed (or nicked), son.]

Not that Buckeridge said any of those things I put in [square brackets].

No, he spoke like the friendly bankers we used to have, when we knew the name of our local bank manager: 'We look for smarter markets where Australian companies can grow,' he said, 'And we look for a sustainable business, where innovation continues to earn money year after year. Burn-out happens when you have to sell the business every year.'

Another kind, yet stern piece of advice: 'Difficult businesses are "lumpy" - they're reliant on lumps of investment or revenue to survive.' So if you're planning a start-up, you'll need to look for opportunities to continually earn revenue. You'll also need to allow opportunities for the ownership to change and a reasonable exit strategy for the investor, because investors need to make money.

Allen and Buckeridge has put around AU$29million into four content plays, losing close to AU$17million on two of them. Of the two surviving, Buckeridge is hopeful they'll earn between one-and-a-half and three times the initial investment.

You probably won't find many risk capital dollars with your name on them in Australia, but Buckeridge believes there is global funding available for creative and innovative projects.

So what do you need for an attractive offering? Start with a good team, find a reasonable market, present good prospects for ongoing annuity and provide a clear exit strategy.

[Heavy. I wish I'd met Buckeridge years ago, when I was younger and had a head full of hair and crazy-arse ideas. He's a lot more clued-up and reasonable than some of the investors I've met. . . ]

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[While I waited