On March 3, Canadian NEW MEDIA editor Jeff Leiper sat down with Australian public broadcaster SBS’ CTO Will Berryman. Berryman has a long history of working in broadcasting, technology and new media around the world. He outlined the challenges facing the Australian content industry, as well as the opportunities that exist for Canadian producers to sell properties to SBS. What follows is an edited excerpt of that conversation. Jeff Leiper: It’s a fascinating communications landscape down here. Will Berryman: It is. The interesting thing about Australian telecommunications is - I suppose it’s a bit like Canada, as well - it punches above its weight in terms of its population size, and the size of its economy. It’s a massive country with 20 million people. People tend to think of Australia as a sort of a rural area overseas. It’s not. It’s the most urbanized nation on Earth. People live in cities in Australia. They tend to hug the coastline. So, in terms of telecommunications, it’s a really interesting landscape. You get the biggest of the bigs in terms of networks here. For example, the terrestrial television network that we run in conjunction with the ABC, our sister network, is the biggest terrestrial television network in the world, and the fastest to expand and all those types of things. The optic fibre runs between Sydney and Melbourne are grand on any international scale, because of the vast distances between there. It’s a very interesting model that way. In terms of electronic media, and even publishing, you could argue that Australia has done a lot to invent the modern electronic press lord. Rupert Murdoch is one of the great exports of Australia. If you open any television production company around the world, you’ll find Australians. That’s a really interesting phenomenon of this country. Communications has always been important. It’s a country that’s aligned itself with Europe and with North America, even though it sits in Asia, in Oceania. And, it’s always been obsessed with communications. Its whole history is trying to find out what’s going on and trying to push information to Australia and the rest of the world. There’s a level of sophistication of skills here that we’ve found surprising, to some extent. I guess the frustrating thing as we look in is that there is so little original new media content being created.I think one of the interesting things to happen in Australia is how the media in Australia can consistently attract capital. It never ceases to amaze me in Australia how embryonic companies, even after the dot com boom finished, can attract startup capital in terms of infrastructure. They get both government startup capital and private startup capital without actually having to prove how they’re going to get a return on it. I think that the level of regulation and trade-off here in terms of government divesting a lot of its entities - for example, divesting Telstra - in the past has created a lot of funds out there to make that politically more palatable. So, it’s put a lot of money out there, made things very sophisticated, but still there’s a gulf in actually making money out of it. We do turn to North America and Europe to see that. I think what Australia often forgets is that, often in those countries as well, there’s no answer. There’s just larger buckets of capital to burn through. So, it’s an interesting time. Essentially, in business sense, it’s quite a conservative country. It’s an interesting phenomenon. I worked for a long time with American companies and worked for a very large American media company for a while, and it tended to always surprise the Americans that Australia did have such a technological level here, but what we do lack is that entrepreneurial sense to take risks that the rest of the world does to make a return on it. There are exceptions. But, by and large there’s still a lot of work to be done. I was surprised to see that broadband Internet access is so much further behind than in Canada. I think that Telstra has changed. Telstra is a very important company for Australia because nothing comes near it. And, even when it’s fully privatized, which it will be given the political conditions in Australia, it will still play an important role as a sort of linchpin that everything can sort of hang off. In the last couple of years, Telstra’s has been sort of half private, and it’s become a lot more edgy. The speed of its broadband rollout in the past two years in the country has just been breathtaking. And, that’s a very different type of telco, rather than some fellow in long socks and a dustcoat coming out and measuring each broadband connection and those sorts of things. It’s a really different type of business. A million subscriptions in a country of 20 million people within the space of 16 months is extraordinary. Broadband grew from 12% last year to 20% this year. Breathtaking. There’s a tipping point and it just grows from there. It’s always going to be an important business. There’s been a lot of debates: should it have been broken up? Should it have been sold into lots of different companies? We’ve been left with an incumbent, and how the regulation affects the incumbent is going to make it important. But, it’s changed the landscape, and it will create an acceleration of services. Australians are great buyers of gadgets, of trinkets for their homes. The strongest part of the Australian economy is home buying. Broadband and digital living has become part of this trend to make your nest egg and your home more elaborate. Plasma televisions have gone through a massive burst of sale here. Surround sound cinemas, DVD accelerated here in an extraordinary fashion. I think that broadband is the same thing. A lot of people consider it a home improvement first. House prices have risen in the major cities here to ridiculous levels. People are capitalizing their homes. The other thing that’s interesting here is that we are on the doorstep of Asia, so we get a flood of different devices and equipment into the country from Asia. MP3 players now, for 80 Australian dollars. Digital cameras, now, for around the same price. We’re getting that flood of Chinese equipment. I think what’s amazing in Australia is that there is no content being produced for these devices. Australia is just being flooded with them. That is changing the digital landscape in the country. I think that if you see those types of devices and broadband and a PC as a way of improving your home that’s why you’re getting the huge explosion. It’s not necessarily driven by waves of content that are being produced. I can’t see one unique content experience in Australia that you could even flag, that’s actually been properly designed and put out there to make a return on investment. I suppose MP3 downloads, at the sort of fringe of commerce, are going to be important. I think the other thing which has really changed broadband uptake is digital photography in Australia. We’ve been very great travellers in Australia. To even visit a friend you know you need to go four or five hours somewhere. So, photography is very important. I think that’s driven broadband uptake a lot, the exchange of pictures between people. There’s been some interesting business cases here. The airline industry in Australia has become more competitive in the last couple of years, budget airlines. There are a number of budget airlines that have gone straight to the Internet, and being the types of travelers that we are, that’s driven a lot of Internet demand. And a little bit of e-government. Paying a bill, banking, all those traditional things that I think are a global experience. Of course, that’s always going to involve the digital media industry in Australia, to produce and make those products, but I couldn’t tie a traditional non-utility product to the uptake of broadband. I can’t see any unique entertainment experience or unique web experience here which has driven that. People aren’t buying broadband to take, say, the ABC portal. I don’t know what sort of traffic it sees, but it must be very popular. It’s popular. I think it’s more popular in the workplace. Watching a news bulletin or catching an audio file or something like that is going to be more important in work time. I think that a lot of the broadband content sites, run by the big incumbent media organizations, and I include ourselves, aren’t necessarily experiences that people take into the home. They’re all part of a wave that happened of businesses wiring themselves up with big connections onto the Internet for e-commerce. I think if there’s any viewing there, it would be that. I even think amongst the large media companies that the web is more utility based than anything. If you look at the ABC statistics, and even ours, the biggest waves of traffic that we get that account for most of our traffic are late-breaking news in areas that are considered specialized to our business. So, for example, weather, soccer, the football network in Australia. So, late-breaking news on global football is where we get most of our traffic. If you go back to the ABC statistics, late-breaking narrowband news on its web site - it has the best independent news bureaus in the country, BBC style - would account for most of its traffic. Anything else is marginal and you couldn’t put your finger on. You’ve seen what the CBC does with enhancements to documentaries, be they on radio or television, and I’m not getting the sense that ABC - and I’m obviously here to talk to you about SBS - are enhancing their programming as a corollary and drawing big traffic to it. I think the business model is interesting. I think with some programs we’d have done quite well in that area. I’ve never compared it to the ABC so I can’t make the comparison. Some of our shows have done quite well, but only where we’ve engineered the television show with its interactive component. We do things a little bit differently within this organization. We don’t have a large new media division. I’m CTO of the business. I have responsibility for the technology and enabling technologies for the organization, including the broadcast engineering, the power engineering, IT, and also, too, the new media part of the business. The new media people in the business are tool-builders. They’re not web producers. They’re programmers, certain types of graphic artists, so, software developers and architects, traditional IT people who put in equipment. I probably only have devoted to the online development about nine people in an organization of nearly a 1,000. But, what they do is make tools, and they make tools for people that make content in radio and television. So, if you’re a radio content producer here, you not only have your tools that have been designed by my broadcast and IT engineers for producing radio, but on the same desktop, working with your same tools to publish to your web site, to your online environment. And, that’s the same with every current affairs news producer and sports producer in the company. There’s a couple of people here who are specialists in the area, who go out and just travel around and make people more aware of what online can do. When that gels and works is where you get the best outcome. That enhancing of documentaries and things, that has to happen in a very integrated way. We haven’t seen that very much in this country with the big media organizations. They tend to build quite monolithic new media businesses. For example, Nine/MSN is a very successful business here in terms of advertising. It’s a successful company and it deals with television and radio because the overarching company of the Nine network owns a very large magazine stable in Australia called ACP. But, Nine/MSN is a company of 150 people that actually sits in a different location to these other businesses. It has its own sales force and its own editors, and it by agreement trolls through and re-purposes content for the web site. It hasn’t made its magazine publishers dual publishing people. The ABC has sort of done that, too. They’ve got a very large company that sits next to television and radio. We do it very differently here as a smaller organization. Our TV and radio people are great at reaching out. If we give them the tools and create some sort of editorial control over the thing, we’ll just let them go. And, I tend to think that that’s a more successful way of working in the long term. Your costs are lower, your outcomes more immediate. The marriage between the two mediums is a lot a tighter. The SBS company makes close to $30 million of it revenue each year from advertising. Even though it’s a government-funded business, it makes nearly a fifth of its revenue itself. I could either go out and say, well, I’ll go out and make a million dollars from online, but I’d just be taking a million dollars off my television business. If we can all pull together and make $35 million out of doing that, it’s better. And, I think over time that’s going to be a more likely model. In the absence of the killer product in an online environment, it has to be the case. It has to be a converged experience at the end of the day. And, we haven’t see that much of it. We’ve seen a lot of failures. People have capitalized up big and sat back and waited for something to happen. And it doesn’t. In terms of the content generating companies in Canada, the independent producers, they’re starting to see some in-roads with ABC. They’re selling converged product to ABC. Are you buying converged product? No. What we might do is, say we buy a documentary that somebody’s already made the web site around the material, we may look at that and, if it suits our purposes, and publishing purposes, well then we’ll promote it and support it and link to it and all of that. So it sits on their server. Yes. Where we can we try to get in early and say, look, that works very well for your country, but we need to make some changes here and sort of work through that, we’ll try and do that. Where possible we get in on the commissioning side and say let’s use the facilities in this business to actually make it work quite well. But, we don’t go out and actively find, you know, digital content and purchase it. It has no purpose for us. The ABC’s kids’ site is where the Canadians are getting traction. Canadians make a lot of great children’s television product. Kids is an entirely market. And, you can do that with kids. That experience is that it’s something that moms and dads love as well. Going to the computer is part of your activity program for the day and that whole immersion that kids enjoy is different. The kids’ attention span and demands for more and more and more and more means that no sole company, like the ABC or even us if we got into kids, couldn’t satisfy that audience. The only content that we would buy for our web site would be typical wire-type content that you’d use in any other media. There’s no value in doing little short films or buying little documentaries. We’ve done those things, but we’ve done them for different purposes. We’ve done a lot of joint ventures. Last year we produced a product over about three years of working called World Tales. In World Tales we took 20 untested teams of animators. These are kids that have come out of school and just haven’t had anything in their resume that they can go out and get a proper job. So, we worked with the Victorian government. We invested in it. They invested in it. We found these kids. We put out a call to action on our radio service. SBS Radio is a multilingual radio service. Most multilingual radio service in the world - 68 languages it broadcasts in. We went out in each of those languages and did a call to action for the audience to say, tell us the stories of your childhood in your country. We picked 20 stories, some of them quite bizarre from other parts of the world, and paired them up with these animators. We brought in mentors, people who had actually done this before and worked to get these 20 animations up to broadcast quality. We published them online with educational content, with behind-the-scenes footage, how they were made, background to the story, and got 22 between three- and five- minute animations for television that we run through our schedule. Did you make that interactive? Was it two way? Some of it was interactive. We did some games online. Did the audience provide feedback? Their own stories? The audience would do that online. They submit to a blog talking about fairy tales and sort of branched off. The successful part of it is when we go in to say what outcome are we going to deliver on this. It’s not to generate enormous amounts of traffic, nor is it about making a cheap television content. It was about training young people. We’re a public broadcaster and have a public duty to innovate and nurture and train. That was the key goal. If I had my commercial media hat on - prior to working here I worked News Corp. and Viacom - I wouldn’t have touched a project like that with a barge pole. Which is why we did it. If we’d had done it for web traffic or ratings on television? Waste of time. If someone offered me the World Tales for anything but television - we’ve sold World Tales into American cable markets as filler material for television, and the young people who own intellectual property have done quite well out of it, which is a great thing that a lot of them are getting other work - if someone said to me just buy this for online, I wouldn’t do it. There’s no dividend in that for me to do that. If a company approached me in Canada or somewhere else and said, look, that’s a great model for nurturing and incubating - because it nurtures and incubates across a whole lot of fields - I’d do it. I’d invest in it. And, I’d invest in it just for the exchange and for those sort of intangible innovation and nurturing types of goals that that an organization like ours should have. Because, it doesn’t just nurture in terms of just raw talent. We purposefully used very risky digital technologies. We got to work with people like Apple Computer and our very good friends at Sun and those people to get some new technology, so the payoffs were wider than just ‘I got a million hits to this web site.’ It enabled us to re-engineer our traditional broadcasting environment here for promos and graphics production. One of the producers on this mission is from Collideascope, which did a tightly integrated production called Rock Camp that had similar incubation and nurturing goals. Yes. We’d definitely have an interest in something like that. The previous project we did before World Tales was music. It’s the lingua franca of youth in Australia, and we’ve got a very interesting youth culture growing up in Australia now. This is a country built and transformed by post-War immigration. In the recent years, say from the waves of Asian immigration in the 1970s and 80s into migration, again, from Eastern Europe and the middle east into Australia, we’re starting to see the second generation of those migrants into Australia who are a very unique culture. The right wing and ill-informed tend to sort of class them as sort of urban ghettos of lost people. They’re not. They’re people that have found the Australian dream. They’re highly educated. Enormous consumption powers, very globally informed in their outlook, and music is the culture that sort of binds them all together. So, we put together this project called Whatever, which was to find kids from diverse cultural backgrounds who are into music, record them, get their buddies to make clips of them, put together a CD and release it. We’re about to release our seventh album. Now some of the kids realize that they’d rather work in the record shop than work in the band. Some of them have realized they’d rather work in the media. Some of them would rather not work in the industry at all, and some of them have stayed. There’s been a lot of cross-pollination. If I was a Universal Music or Sony, it’s a project I wouldn’t touch with a barge pole. It’s not like finding a hit and putting it out there. Our project was not to do that. It was to fulfill a social dividend and create an economic model for it. The Whatever project affected hundreds of people. We toured the bands. We used that methodology of using online and new technology to nurture and promote across all media. The lawyers that we used to do the intellectual property clearances - we tried to get those kids involved. And, the economic mulitplier effect in a media economy of doing that is far greater than just trying to get hits on a web site. The payoff is far greater. I think that project cost me - well, in all of its time it’s cost me well over a million Australian dollars. But I reckon in terms of training outcome and its generated millions of dollars in terms of extra business and follow up. And, that’s why it’s important. How did you put that production budget together? A million dollars - was that just straight out of SBS coffers? No, the Victorian government got what what we were saying. A lot of other investors I’ve looked at have said, you know, just give me something online, cut a ribbon and we’ll have a party. Get it in the paper and then we’ll move on to the next thing. Why commission a televison documentary? I didn’t want to do that. I can’t say what the payoff is apart from having a party and getting some agency in the newspaper for saying that it did this great thing. The Victorian government through its new media development fund, which is considered more economic development that film commissioning - they have a job to do, you know, and it’s to make linear film and television for either export. New media is such a nascent industry, and it involves so many other economic inputs that need to be nurtured, that there needs to be the type of investment to actually nurture them. We did a project in South Australia, with the South Australian Film Corporation, called MySpace which was a bit different. We wanted to run promos for television here based around the concept of space. We wanted to use the untested and untried again, because I think that’s my job. We have to bring in new talent. So, I invested with South Australian Film Corporation with that, and our very good friends from Apple Computer came in and invested, as well. We built a lab for new types of production in South Australia. We don’t have an office in South Australia. So, South Australian Film Corporation set aside some space. We attracted 20-odd young talented people that had been trained but didn’t necessarily have the experience, and we set them about making these promos. The promos had to be good enough to go to air, but they also had to use new technology. We encumbered them with two burdens. We got them to use new types of technology with Apple. Now, the benefits for that are now we have trained filmmmakers in South Australia and we train them across a whole range of things, so that people realized they didn’t want to be Steven Spielberg, they don’t mind writing copy, so they get a job in an advertising agency. One fellow liked the Apple kit so much he went to sell computers, and took two other filmmakers out. He saw the business opportunity. Everybody that worked in this area, and did well out of it in this training stage, realized that they needed a G5 at home if they were going to get into the business and bought the equipment. So, the economic uptake of that, getting value out of people who had been trained, was very, very valuable. And not just to go on and make other web sites - even though some people did that, and did quite well. I really push for people to find the multiplier effects. That’s the key to success. If I’d just gotten my 30 or whatever promos on air, we wouldn’t have necessarily have judged the thing a victory. It had to deliver off a whole range of things. When those kids come back to me next time and say, ‘can I do something else?’ I send them off to the professional arms of the business - off to the independent commissioning arms, off to the ABC. We’ve done our job, and until somebody tells me otherwise, we’ll keep making that our job, because people have to do it. I sit on a government committee here looking at training in the industry. We have five and a half thousand people in some form of teritiary or post high-school media-based training, and a lot of it is multimedia these days.Kids see Kate Blanchett win the Oscar and they all walk up to film school, to technical colleges and universities and film study school. Yet, there are post-production companies here that have to import hundreds of people from India and the U.S. to work, because there’s a gap. The economy’s invested in five and half thousand people at any time to be being trained, but it’s not making that extra bit of investment to make them economically practical. I consider it our job in new media development to use that to bridge that gap. And, it works. In order to make those budgets bigger, I’m struck by the potential to work with Canadian partners and leverage off some of the funding that’s available in Canada. It strikes me that at some point you want Australian producers to be creatively collaborating with international producers. Why not? I just recently leased high capacity optic fibre between London, Los Angeles and Australia, and am about to branch that network out. We are connected to thousands of media companies around the world now. Once I hit the BT tower in London, there are 1,600 television stations that I have high capacity video and data connection 24/7 anywhere in the world, anywhere in Europe. And, in the U.S. it’s exactly the same. It is a collaborative media environment. There’s nothing to suggest that if we wanted to do a business report on SBS Television here that there’s anything to stop me from doing it out of London, Los Angeles, or anywhere else that can connect there. Knowing a bit about Canada, we’re very similar countries. There’s sort of an Anglo-Celtic tradition. There’s a fondness for Europe, and probably a lot more so with Canada. We’re both countries that have to grapple with urbanization and large population centres covered by a tyranny of nature. I think there are opportunities there to work together there, particularly if we can find the right opportunities. I’m forever sniffing around when somebody comes to me with an incubation project. I always Google a lot of the participants to make sure that they’re not documentary makers from the 90s and failed web development companies and things, because somebody else can take a risk with those people. I’m after unlocking this sort of investment in education’s putting into develooping new talent. Not all of them are going to make it, but the more we can do, the better. I had a good chat with the Writers Guild here yesterday. We were talking a lot about a lot of that demand and that you don’t want to be dependent on the vagaries of the American dollar to attract production here. You need an indigenous industry in film, television, new media. They’re looking at the Bell Fund model as a way to drive that. Where the money comes from, who know? Maybe it’s T3, maybe it’s something else. It’s like a gentleman’s game of snooker. You have to nominate your ball. Why are you doing this? What I forever hear out of people that have been entirely funded via the public purse here for entertainment is: why can’t the government just give us some mad money that we can throw about? It’s like any form of industry, you have to develop an outcome. It’s not just an opportunity for an incumbent production class here to be sustained by. There’s a gulf in knowledge. Whether it be online media or film or television fund, it needs to become a productive part of the economy. I don’t think film and television, apart from certain educational examples, and things that are in the national interest, or even online, should be treated like museums. Museums are repositories of culture that sustain a country, and there are elements of documentary and certain types of filmmaking and capturing the moving image that are going to fall into that category. But, there’s a huge window of opportunity in types of entertainment and types of media that are never going to make that grade. But, still there’s an expectation that that’ll be furnished by the same types of things that keep our museums going and our educational institutions and those types of things. And, that’s really got to stop. You’ve got to start making productive outcomes from the large part of the media. I think it would be intolerance to say here’s some money for an incumbent filmmaking class to go and make some stuff for a web site with the kind of hope that somebody might look at it, and then that money’s all dried up, and we sit down and wait for the next lot of money to turn up. I don’t think that that’s necessarily wise. I’m struck by the degree to which a lot of people in the media industry here are willing to compete on a level playing field. I get the sense that for the BDUs, the protectionism isn’t quite the same level it is in Canada. There’s no national debate on whether Fox News should be here. We just had that long fight. Should we force them to have a Canadian partner? Should they be Canadian owned? I think if I was a media company in Canada, I’d be very frightened of that massive wall of material that was within driving distance. One of the reasons to not be so fearful here is that satellite freight costs are $6 minute to the rest of the world. That gives you a bit of comfort. But I think, too, we didn’t jump into this. There’s a decade of experience in the country where we’ve spent a lot of government money in production. The public broadcasters aren’t funded well, but combined funding ABC and SBS is a billion Australian dollars a year. We have film investment corporations. We’ve got state film bodies. We’ve got film and television schools. We’ve had waves of successive digital media funds. But still, we’re saying that we don’t have a strong film industry. Now, it’s not a political comment to say that we’ve probably got to have a look at what we do. We’ve probably got to start thinking of it in a little different way. I think that the wider public in Australia - the taxpayer - seem to be happy with their media. They go to the movies. They buy CDs. They watch television. I think if we don’t want to cut off our nose to spite our face, we’ve got to make it more productive. I’m reminded, as you chat about SBS’ approach and some of these approaches to public policy and content funding, of CHUM and how they approach interactive. They’re a private broadcaster. Very innovative, but when they innovate in new media, it has a bottom line. It has to generate profits. I think in our case, they’re not necessarily dollar profits. There are other profits. They’re fourth line profits. I’ve got a person that I’ve hired that just looks at measuring those bottom line profits - the fourth line dividends that we may get out of a project. That’s really important. I mean, you’ve got to approach things with that type of eye. Then you can actually go back to people and say, look what we’ve done. We said we were going to create this. You said that that would have a benefit. We actually delivered it. I think that that would make a stronger, more confident industry at the end of the day across all areas. I think online’s a very nice environment to do that. I think it’s a very, very, very good environment to make that happen. The risks are lower. Bandwidth’s more infinite. It’s cheaper to put a megabit out there than it is to do it in a broadcasting sense. Even in our film commissioning model here, we’re the largest commissioner of Australian documentaries and film in the country. We run a thing here called SBS Independent. It does everything from important documentaries for the future of Australia, but also for entertainment and drama and those types of things. One of the key arguments that we make out of SBSi, because we commission and outsource production to the industry, is its economic multiplier effect. We don’t fund all the show. You’ve got to go and find a lot of other money. We get a television program out of this and so do the marketing, and you’re getting international sales rights and whatever, and maybe some pay TV sales. It has a multiplier effect of at least five in the economy. We’ve got to start thinking of ourselves in that type of way. I think new media’s a good place to start.