Creative Investment Forum
Digital Catapult's goal is to be a translational layer between new ideas and business implementation
most Catapults are verticals - digital is more of a horizontal, we help businesses move up the adoption curve
we think about where different sectors are on the adoption curve - creative industries are the most digital of all
Creative industries are being disrupted on a regular basis - the business models are always evolving
the UK is a real player in creative industries, with global reach.
There are limited sources of funding in the UK - we aren't funders, but we build tools to help create it
if you look at where AR & VR are growing, we can see content markets beginning to grow
the demand for content is a lot stronger with many new services that are commissioning it
Music is comping back to growth for the first time in 15 years, but the value isn't always getting to the artists
one thing we are good at in the UK is mixing public and private funding for creative arts
the idea today is to start a conversation about the key problems of the creative industries
over 90% of the creative industry is freelancers, and access to finance is a limiting factor for them
if you go on youtube, trending every day is a video of cats - is this the wisdom of crowds, or folly?
freelancers and creatives pivot most days of their lives, between clients, projects and different sectors
the creative industries are £87B and grew 34% between 2010 and 2015 - bigger than the construction sector
The UK is .00012% of creative and cultureal trade - we can grow a lot from this
94% of the creative industry is small companies; 43% of the workforce are freelancers
the team behind Angry Birds made 51 games before Angry Birds took off
Angry Birds only took off after they explained the motivation of the birds, and why they were angry
there are 2 approaches - Aggregate or Curate and curation is winning out
sites curate for you - staff picks, based on genres, based on popularity and more
Goldfinch entertainment started curating investment in creative industries - bringing other investors in
last Thursday they pivoted into Goldfinch Studios - now a digital production company with their own distribution
this model of curating investment needs more exploring - its like kickstarter but for bigger investments
There is a cruise ship company in the town of Papenburg in Holland, pop 37,000 - 50 miles from the sea
no-one thought that Papenburg would dominate cruise ships - this is patient finance - been there since 18th c
we need this kind of patient investment, not just the 3-5 year horizon, but something that will last and grow
If you give a good idea to a mediocre team they will screw it up…
If you give a mediocre idea to brilliant team they will either fix it or throw it away for something better
Aardman made Wallace and Gromit for £11,000 - now their value is huge - they employ over 600 people
Glee - one of the most successful TV shows started off as a web series
I found 80 writing competitions in one day - most are very small
Danish Broadcasting got writers in a room and wanted original works, and made Borgen, The Killing and The Bridge
The Killing revised the funding for TV Series - 10 Danish writers changed the world of english speaking drama
I run Capital Enterprise and 2 other investment funds - we've invested in 110 startups in last 4 years
we have dabbled in creative - done 4 or 5 funds
This is s difficult sector for investors to deploy capital - the high fragmentation is hard
the 2 biggest competitors to a creative business are the individual and giant corporations
I founded Station 12 https://www.station12.co - I was in operational media, then switched to investment
at the early stages it is very difficult to get investment in creative ideas
there is no shame in having a lifestyle business in the creative field
the best way to fund your business is from sales revenue, not external funding
I began in music and arts broadcasting, then moved into the record business.
We now help fund films in partnership with the BFI and BBC, and games with Imaginary Studios
our investment is always in the talent, it has to have an outcome and we need a private match for the funds
there sometimes seems to be more money than good ideas, which is why a lot of shit films get made
the regional growth funds depend on the idea - we don't have a production fund any more
it is hard bringing anything to fruition - perseverance really matters
there is no money at the early stage - is there a way to support them so they have a chance to be viable?
most creatives don't give a monkey's about the business, but about the work
creators care about reputation, and investors are not patrons
we should incentive rich people to be patrons, but we also need investors too
Is there a skills gap?
there aren't that many new ideas - a lot of them are variations on a them, but ability to execute matters
what makes an idea attractive to investors is ones that can make money - you package rights in advance
It's all about timing - none of these ideas are new - it how you make it relevant to now
The creative sector looks at tech enviously - tech has all the funding, but still selling ethereal productts
Don't speak to investors until you have the team - they will fund a team over an idea
Netflix and amazon are putting lots of money into production - there is always a tension with distribution
we're paying a lot less for content as consumers - we're all winning from the cheaper tech distribution
Why did Channel 4 pay £24M for Bake Off - they bring their viewers with them
Netflix is still not making a profit - it needs to commission content to grow its audience too
social media is a great opportunity for freelancers as everyone needs content for marketing on social media
there is a hit factory notion - pick 4 or 5 winners a year, whereas pick 1000 and we get more chances
digital now means we have instant global distribution -we need to be in a position to fund these studios too
we get pitched a lot of games companies - they want £3-5M for marketing - we know 80% is wasted
if you build a fantastic game, it still takes a hell of a lot of money to get to the top of the charts
we have an infrastructure problem in the creative industries - we are dominated by the US - we need to grow
we have the BBC, but they can't support everything. Having more quotas would work to stem US volume
British Growth Fund are competing with private VCs in growth - put that in the early stage instead
netflix and amazon are not an advantage to us - we're up against a multinational broadcaster
in the UK, as soon as a business gets to a certain size we sell - we don't keep growing them
that's why we need a team with a long term view - to stick around
these are founder led business, thats why they grow
Spotify and Skype were really built here in London - but with foreign founders
there are some amazing technologies that are now going mainstream - VR, blockchain, AI
AI will automatically generate content - blockchain will get it paid for
the incumbents are disrupted by new technology to gather audiences in a different way
the cost of making something is not that expensive now, but we still need to get people to see it
we have problem with institutional investors being risk averse who would rather support us startups
the uk has a relatively small market, but the us is 7 times as big and you don't need to be that good to scale
Technology doesn't rule - a good idea will come through and creative talent is key
we're looking for things with transmedia - the widest audience
I'm Becky Gregory-Clarke lead technologist for immersive technologies
CreativeXR is a programme of content-led R&D
immersive tech has a potential fro new creative formats - a new medium to tell different stories
we have the creative culture, but there is not enough content for consumers to buy into immersive
it's hard to invest in AR because: lack of uptake; lack of monetisation options; formats are unclear
because we don't have a clear set of content types and formats, we don't understand the audience
content-led R&D can be difficult to define and justify - may need to tie to a research or tech question
if you are solving a problem for the users, you have a product. If youare not solving a need, it's harder to define
having enough trial and error time like Angry Birds is difficult to justify in advance
if you add in uncertainty about headsets and devices, then that makes it even harder
the only way to solve the lack of content is to make content and learn to make it better
this also exposes the pain points in the production tools and models - content led helps here
the kind of learning-on-the-job R&D is somethign small companies are used to doing
I used to commission new content ideas for the BBC - we made 6 or 7; 1 was great, 3 we learned a lot, 3 less good
doing more lets us see the range of different possibilities rather than picking one
Funding is not the only difficulty - you need to do some early idea development before commissioning
there isn't a clear commissioning structure in VR and AR, and there is a big gap in early stage content funding
you need to spend the time on early idea development - CreativeXR is meant to support that early stage ideas
we have a12 week programme with new experimental consumer facing content from Arts and Culture
up to 20 companies will receive up to £20k of funding, and access to digital catapult facilities
and end with a chance pitc to content commissioning funders
we want artistic and cultural experiences; new storytelling; new interactive entertainment
and they must be using VR or AR technologies
I'm at UEA working on creative writing and literature
I was a full time artist from 2007 - I experienced VR, and launched Neon as a VR development company
we are at film festivals and nominated for awards- I googled VR in belfast and put a demo togteher for sxsw
I set up a company so we could get arts grants and got funding from the NI arts
this happened because we were in Northern Ireland - we connected with people quickly in a small place
currently in pre production fro a second VR idea - working demo for a health app and an AR demo
I'm Malath Abbas from @biomecollective - I had a startup model, but switched to a collective in 2015
we are games arts culture and space - we're based in Dundee so collaboration happens rapidly
we have a broad collection of work - some are simple flash games, some are more Arts projects and a VR game
Killbox is a game we made - a short form game thta lats s10 minutes and explores drone warfare
it was really designed for museum and gallery exhibits, and also worked as a performance space
there was space for 2 players and audience to watch - there was a performer who would mark kills on the box
as a collective we have done a bunch of AR projects - a 2015 at national museum of scotland and projection art
making physical spaces playable is key part of what we do - we project on buildings and fill warehouses
our working space is a coworking space as well as our collective
I am a film producer - I'm not good at pivoting, I'm good at doggedly doing the same thing for years
you used to be able to make art house films for small audiences and those have suffered now
I made a film called Chalet Girl which was a commercial rom com - my 1st film was £6M
I work with a distributor as part of the funding effort - not enough producers think enough about who will see it
I always think about what is the log line that will sell a film to an audience
I think of theatrical distribution as the first thing - though I wouldn't turn down a Netflix deal
I look at comedies, rom coms and thrillers, but not dark dramas
I found that "Chalet Girl" was seen as too middle class and elitist, so now I'm looking for broader appeal
I am a classic cottage industry producer - I don't have an overhead deal, no finance umbrella
looking at creative england and the BFI, but they don't back many projects - trying to set up an SEIS
You don't want to get a writer to work for 2 or 3 months for free - so I need development money for that
optimism, persistence and radical change in direction are standard for those of us in creative positions
I just switched from being a creator to working with the AHRC on digital economy projects
I am trying to get universities working better with the creative sector
if you count by number the creative industry is SMEs; but not if you look by turnover
there is a lot of research done by universities about the creative sector, but not much experimental work
we want to support key sectors of the British economy with R&D and the creative industries matter too
Creative R&D doesn't really follow the industrial model lifecycle - the content cycle is different.
Creative businesses thrive better when they cluster together and share workforces - it gives a career path
it acts as an attractor for career paths too as there are multiple jobs
we want to fund 8 clusters and bring university research that is about experimental forms of media
we want the universities to understand what business's challenges are and fund research that supports SMEs
we're getting a lot of proposals that are a bit too university-like and not businessy enough
I want to hear more about what made you pivot, and what investment that made available
I started my career in NI by writing a report on racism and working on equality for years
I realised that I hadn't given art a chance, I became a full time artist in 2007, painting nonstop for 3 years
last year I had the VR experience and found ti as an awakening and saw the opportunities it affords
there are huge problems with VR still, but there are huge opportunites too
it is hardware, software and content - we're doing work with reactive content on deep data
I started at a traditional startup, and the pressure was always to grow and scale
the VR art project we did as a small scale one with a museum felt much better and more creative
I travelled and saw that collectives were making more sense and that would fit better
Biome Collective has a thin support layer, and is focused on projects rather than products as such
we have project that may turn into a product, and we'll spin that out as a special purpose vehicle
the scale of Dundee naturally leads to collaboration - you pay into the collective to get a desk at the space
where pivoting is important is knowing which projects are worth persisting with and which would give up
I went on a trade mission to LA and asked studios what they wanted, and that meant I shut down some projects
I don't think this is an ageist industry - producers work into their seventies
to make something genuinely excellent is not a rapid process, you do need the persistence
all the producers I know largely work independently - if we had a heavily subsidised space
there's a new genre out there -producers aren't dealing with what is in the market
I researched the life of a model who finds an audience and then produces what they want
there are so many people out there looking for something that is not being provided - identify the audience
there a programme called pkchat for African kids in this country sharing their life experiences - went to youtube
look at Fox news - they targetted an unserved audience and took over
I'm looking at films that have taken off with women audiences already, and I want to make more of those
Giving people what they know for sure what they want is key
how does the business model work for collectives if you make money? IP and revenues and how you divvy it up
I think IP rights and ownership is a big problem and counterproductive - I'd rather give it away
our collective is a company limited by guarantee with 5 directors who were founders and another director
we are set up as a nonprofit so that money goes back into the collective
we have graduates who have joined us, with us as mentors who then get publishing deals
but we are genuinely making it up as we go along
we didn't have a name originally, we chose Biome after that
who pays for the space?
we pay fro our own desks, and several of us bring business in and are a magnet fro work in project from
this final session is projects, people and portfolios
I'm project director and curator, mainly for young people and worked at the Tate for years
I'm going to give everyone up to 5 minutes to talk about them and pick up somehting else
I'm project director for an initiative in Newcastle exploring how universities work better with creative industry
we're called Creative Fuse North East http://www.creativefusene.org.uk/
we're a collection fo relatively small cities and towns in the NE - we tend to be chippy northerners
I work at Newcastle nNiversity, but work across Newcastle, Durham, Sunderland, Northumbria and Teessside
we want to support our industry to be more technically aware and stimulate spillover into other sectors
we want to deploy a technology into a new market and grow that
we have a research project across surveying about 10% of the 4100 creative business in the NE
we are investing £400k across creative industries and universities
we recognise that universities could do more in the economy working with businesses
I'm Emma Hayley - I founded a company to do book publishing
I did a series called Mango shakespeare romeo and juliet, which was bought by a US publisher
I began with a little bit of funding and maxed out my credit cards
from Manga Shakespeare we went on to do many other series, but Manga Romeo and Juliet is the best seller still
I haven't really pivoted, but kept growing - the potential of the books we publish is great,
we're not getting books out to other media as I would like - I would like more adaptations
I am director of innovation for the arts council http://www.artscouncil.org.uk
we've been around since 1945 and are part of the creative industries with a £750M a year budget
we aren't analog or digital, we are about funding content about how we tell stories about ourselves
what I heard today was a lot fo people who pivot daily or monthly - we pivot like a supertanker
we run a range of funding programmes, they have criteria that focus on the same areas
criterion 1 is quality - the strength of the idea. 2nd is public engagement - who is being engaged with
the other 2 criteria are finance and management to see if you can deliver the project
we have or 18/19/20/21/22 funding round and what programmes they go into
we are just developing our 10 year strategy for the 2030 period -that is where we can turn
I come from a venture capital background, advising companies and funding
2 of the Dragons Den dragons raised finance through me. I've been involved in films, Yotel, Pret
a lot of these were startups - you want to be creative, get the finance and do the work
it's an entirely impossible situation - I want to learn what you are all doing
I wonder if incubators and the models we use in the tech industry could apply to the content industry too
Harriet said relationship development is not won overnight - how do you find talent?
the key problem for universities that we are too engrossed in our own disciplines, not the talent outside
how can we as institutions full of experts open ourselves up to help the smaller firms and give access
there's an organisation called Breeze creatives that turn redundant buildings into artists studios
for us what works is having regional offices on the ground close to artistic communities
there are people who won't apply to us, and we want to drive more applications from certain places
there are places like backpool, luton and slough where we don't get applications so we work to get more
we find there are places we don't get any applications from at all
if you need to be persistent then the pressure is on the individual - having a collective view is welcome
as an artist, it's about making art, not money, but the industry is about making money
the talent needs to understand that the creative industry is about money and work, as well as art
we haven't really solved this - we tend to be about funding charities and the money goes back into the body
so eg the National Theatre makes money but goes back to the NT
the Lottery money can't be used for a profit making business, so we have to be careful there
we need to work that faultline between profit making and social research
there are people on the fringes of the artistic spectrum who do ti for the personal reward of being creative
we want to try to demonstrate how they could add value to other organisations
so not commissioning something for the foyer, but how an artist could bring creative thought in
we want to foster those relationships - we had 10 by 10 in Sunderland -10 artists with 10 employers
2 years on many fo the collborations are continuing
what I do seem to see is that so many are on a project by project basis, and that is hard to fund a company
it's like the danish television model - we'll give you 3 years salary to give them work
it would be great to give funding for that kind of duration?
I'm echoing your idea hazel -there are a lot of incubators and accelerators out there which give some funding
maybe it is a model of a collective
I think you are reinventing the Art College as a 3 year institution to fund them to collborate
for a comic book creator, there are not good ways to get your work out - self publish, publisher or kickstarter
another way is Arts Council - they get a year to create and then we publish the book
is our role to support people for a while and then they can go off funding
we set up funding for 'the difficult second album'
I have a plea - for a mobile technology company from newcastle
we are an established technology business, but how can we get involved with the projects
the challenge is that there are so many of these initiatives, but we don't always hear of them
it is much easier to collaborate in newcastle than in london. If you're a medium sized business it's hard to find it
having the companies and the artists connect and swap cards can start things happening
when you ask a university to develop a bid, you get a particular form of bid
a match making service like that sounds like a great idea -looking at you, Arts Council
we are looking at supporting the sector rather than an individual art project or company