Companies in games, TV and publishing are having to relearn the way they do business and where their products sit in the market. Their business models are rapidly adapting alongside the hunger for multi-platform, as it’s no longer acceptable to simply pitch for six 30-minute episodes or a console-only game. They’ve got to think about the social aspects of their product, how it can be spread online and which other mediums it could bleed into. The race to digital has rendered existing revenue models uncertain and put the whole industry in a period of disruptive transition.
Funnily enough, banks and investors don’t really like disruption or uncertainty. They like a nice clean trajectory with some profit and an exit. Perhaps unsurprisingly then, they’re not really jumping at creative companies at the moment and so the desire for public funding has become greater than ever.
One upside is that it has forced creative companies to consider the market and to commercialise. Now that doesn’t mean they’ve sold out or are creating less interesting content, but if there’s only 10 bits of funding to go around 500 companies then they’ll soon brush up on how to pitch, write a solid business plan and professionally structure their business – things creative companies have sometimes been weak on.
While that’s not exactly the most exciting proposition, it does mean that when banks and investors come back around to creative companies – and they will – then the sector will be in a great position to capitalise.
In the meantime, public funding will help seed great new start-ups and give investors the assurances they need to work with creative companies. The worst of the downturn is probably over for creative companies. Now it’s not so much weathering the storm as planning how best to build for growth; and that’s a very exciting prospect.