New media companies look for more government involvement, survey finds

The emergence of online marketing and distribution is one of the more dramatic changes the multimedia industry has experienced over the past fours years, according to a recently released report by AC Nielsen DJC Research. The study, Profile of the Multimedia Industry, goes on to say that despite the existence of several government programs to help fuel the growth of the industry, digital media executives believe the government isn't playing an active enough role within the emerging sector. In early 1999, the most comprehensive source of information on the new media industry was a 1995 report conducted by AC Nielsen for the Interactive Multimedia Arts and Technologies Association (IMAT) in collaboration with Industry Canada. As a result, Canadian Heritage, Industry Canada, the Department of Foreign Affairs and International Trade and Human Resources Development Canada commissioned a new survey on the changes that had taken place during those four years. The Internet is changing the face and manner of business, and new media companies are at the cutting edge of this development. As was noted, the adoption of online marketing and distribution as viable business strategies is changing the make up of this industry. The study indicated that industry support for online marketing and distribution has increased three-fold over the past five years, with 85 per cent of web site development companies and 68 per cent of multi-product oriented companies now favouring such online activities. The web is also becoming an important medium for advertising. According to another recent ACNielsen report - Internet Planner 2000 - nearly half of all Canadians over the age of 12 have access to the Internet or are online. Nearly three-quarters of web site development companies say they use the Internet for advertising purposes. For an industry that is rabidly anti-regulation, it's ironic that the survey found a desire within the sector for increased government intervention - albeit in a proactive way. The survey data show a huge difference between the perceived level of government involvement and what the industry deems as necessary. "Over half of the respondents in 1995 believed that the government should be very active in providing tax credits, loans, employment and training incentives to the industry," the survey reports. On the issue of tax credits alone, 73 per cent of respondents in this most recent survey say government should be more generous with tax credits. The survey also reveals that participation in incentive programs appears to be increasing. "All government-led initiatives, with the exception of grants, enjoyed an increase in usage over the 1995 survey period, most notably a third of the respondents (31%) making use of a new program category, International Partnering, as well as a 100% increase in usage of the Federal Business Development Bank," the study wrote. Skills shortage continues to plague industry For 40 per cent of firms, finding employees with the right technical and creative skills is more difficult now than it was two years ago. It's a factor most respondents say is having a significant impact on their business operations.But that demand for creative talent doesn't reflect in rising salary levels. In fact, the survey identified an apparent downward trend in renumeration for both managers and administration staff. In 1995, the majority of companies (54 per cent) reported that management and administration staff averaged more than $65,000/year. In 1999, nearly two-thirds report that management and administration staff are reporting salaries of less than $35,000/year. The same downward shift in salaries also occurred among creative and technical staff. The survey suggests the salary discrepancies may simply be a by-product of growth, "including the addition of less-senior administration personnel to handle administrative functions which, in the formative stages of many firms, were handled by senior management staff."

New media companies look for more government involvement, survey finds

Broadcast | April 6, 2000

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