Executive Summary


The Aims of the Survey

The survey aims to provide measurable data on the role that new media content production companies play in the Finnish economy.

The definition of a content providing company in the new media industry in this survey includes companies that solely or as part of their other activities produce content products that are distributed in digital form (e.g. as multimedia, on CD-ROM, or over computer networks) and companies whose business is to sell, transfer, consult, distribute, operate, or is otherwise concerned with these products.

The definition excludes traditional publishing, videoproduction and film, TV, and radio companies. Also excluded are traditional computer, programming, and telecommunication companies, unless they are Internet service providers.

The survey focused on the following questions concerning new media industry companies:

What type of companies form the new media industry?
What is their turnover and employment capability ?
What are their main products?
How do the companies asses their own weaknesses and strengths?
What kind of co-operation exists?

Commissioning and Funding of the Survey

The survey has been commissioned and funded by Mediastudio, which operates at the Centre for Extended Studies of the University of Art and Design Helsinki with funding from The European Social Fund and The Finnish Ministry of Education. Mediastudio will use the results of this survey to answer the educational needs and to initiate development projects within the new media industry.

The survey was planned by Mediastudio and the New Media Group of the Helsinki School of Economics and Business Administration. The survey began in January 1997 and was concluded in April. The final report was published on the 22nd of May, 1997,

Methodology

The survey is based on an informed questionnaire . 104 answers where received (n=104), the answering percentage was 38. The validity of the conclusions drawn from the questionnaires was enhanced by structured in-depth interviews with key professionals in the new media industry.

The Main Results of the Survey

New Media as a branch of Industry

In the initial phase of the survey 271 companies where found to be working in the new media industry. The complete number can be estimated to be 300. Of these, 60% specialise in new media and 40% include it among their other business activities.

Geographically the companies are predominately located in Southern-Finland. Approximately 70% of the companies are in the three Capital Area Cities of Helsinki, Espoo, and Vantaa, or in their immediate surroundings.

The combined annual turnover of the new media industry content producing companies that answered the questionnaire was approximately 65 million Finnish Marks in 1995 and grew rapidly to 250 million marks in 1996. The budgeted turnover for 1997 is approximately 500 million marks. These figures show a turnover growth rate of 375% from 1995 to 1996 and a budgeted increase of 100% from 1996 to 1997. The growth reflects the establishment of new technological methods and the substantial expansion of the Internet.

Competition in the field is expected to grow more fierce and customers are expected to become more quality-conscious. Fifty percent of the responders to the questionnaire agreed with the following market prospects for 1997:

The growth of the new media industry’s market will continue

Customers will become more demanding
The importance of content expertise will become more prominent
Customer service will be emphasised
Business skills will be essential
Competition in the field will increase

The Strengths and Weaknesses and the Opportunities and Threats in the New Media Industry (SWOT Analysis)

The companies taking part in the survey undertook a SWOT analysis of the field.

Strengths:

1. Technological know-how

2. Companies are small and flexible
3. Strong infra-structure
Weaknesses:

1. Dilettantism

2. Lack of content expertise
3. Smallness of companies
Possibilities

1. Continuing growth of demand

2. Finland will continue to be in the forefront of the technology involved in this field
3. Co-operation with international enterprises
Threats

1. Lack of marketing and sales skills

2. Poor quality of content
3. Lack of funding

Main Focus points in 1997

The companies reported their main focus points in 1997 as:

1. Product development and increasing know-how

2. Expanding into new markets
3. Increasing capacity
4. Creating net-works of co-operating companies
5. Developing their production-cycles

The Companies in the New Media Industry

The companies are very young, 75% have operated for two years or less, 16% have been in operation for three years, and only 9% have been in the field for four or more years. The typical turnover of the companies is very small due to the newness of the industry. Larger companies have not yet had time to grow. Entry requirements into the industry have been very low resulting in many small start-up companies.

The average age of personnel is 29 years and 53% of them have an academic education.

New Media Industry companies co-operate actively and are eager to form net-works among each-other to the extent that 35% reported that their business idea is completely based on net-works of companies. Currently, most of the co-operation is subcontracting and exchange of know-how and information. Only 7% of the companies reported no co-operation.

The Customers of the New Media Industry

The companies strive to obtain long-time business relationships with their customers (85% of the responders) and to provide maintenance, up-grades and development of delivered products and solutions (65% of the responders).

The major product categories of 1996 were:

Corporate or organisational communication products, 81%

Culture and entertainment, 10%
Educational material, 8%
The major customers were:

Industry, 39%

Commerce, 7%
Publishing, 6%
Computer technology and telecommunications, 5%
The Public Sector 5%

The rest of the customers were from smaller and uncategorized fields of operation.