Culture is future » Financing and economic models


Does the consumer detain cultural power ? FA – Kurt Salmon Debate, June 11th, 2013

“Books, music, films, video games … how have digital technologies lead to a redistribution of cultural power?” 

Paris, June 12th, 2013 – At a time when France’s exception culturelle is subject of heated debate, determining how digital technology is included in the cultural and creative industries’ budgets becomes a pressing matter.

Philippe Pestanes, Partner in charge of the development of the TIMES practice (Telecommunication, Information, Media, Entertainment, Sport) at Kurt Salmon, completed a preview presentation of the first results of the international and exclusive survey lead by Kurt Salmon[1] (cf. Kurt Salmon Synopsis, PDF) during a round table discussion organized and hosted by the Forum d’Avignon.

Anne Flamant, Head of Banque Neuflize OBC’s film and audiovisual department, and Nicolas Seydoux, president of the Forum d’Avignon, made the opening remarks. Also present were Philippe Colombet, Development Manager at Google Books France; Serge Hayat, co-founder of PeopleForCinema, President of Cinemage, and co-president of ESSEC business school’s Chaire Média & Entertainment; Nicolas Gaume, President of the National Video Game Union; Alain Kouck, Chairman and Chief Executive Officer of Editis; Georges Sanerot, Chairman of the Management Board of the group Bayard; and Luc Babeau, Musical Managing Director for Harmonia Music.  


- Digital technologies have prompted a shift from supply marketing to demand marketing: Philippe Colombet, development manager at Google Books France, contends: “We are seeking to know where the new uses of these devices are coming from and how to respond to consumers’ demands, regardless their tastes”.

Hence the potential risk of seeing prescription and innovation efforts disappears, as claims Alain Kouck, Chairman and Chief Executive Officer of Editis: “Distributors know what consumers desire. However, this could have an impact on the editing and creative industries, thus leading to a homogenization of products and tastes.” Therefore, it is necessary to escort the consumer as underlined by George Sanerot, Chairman of the Management Board of the group Bayard: “Consumers have multiple facets:  they need to be escorted in all places and situations, and led to discover new things”.

- The consumer’s power is conservative, reminds Alain Sussfeld, Managing director of UGC, who was also present during the discussion. Consumers tend to go for what they know. They know what they do not want, rarely what they do want. Innovators are not consumers. Supply will continue to generate demand, well beyond the market’s capabilities.”

- Luc Babeau, Musical Managing director for Harmonia Music, notices that digital technologies allow small-scale producers to gain visibility: “It was difficult to gain visibility in stores due to constraining shelf space. However, our entire catalog is now available online.” The challenge for producers thus becomes to gain visibility amongst an abundance of content. “If today there are 1.8 billion smartphone users, there will be 4.5 billion five years from now, asserts Nicolas Gaume, thus establishing a huge potential for establishing cellphone games.” Video games are not solely impacted by these changes. “The impact of cellphones and the growing use of icloud storing encourage all stakeholders to adapt their strategy accordingly”, contends Philippe Colombet (Google).

- Digital technologies facilitate the emergence of new devices available to both creators and consumers. If they indeed generally grant greater access to the audience, as is the case of self-publishing devices and social networks, these devices do not entirely replace more traditional ones. Hence, crowdfunding cannot replace traditional funding tools. This is even truer for heavily capitalist industries, such as those of film and video games. “Funding a movie is very costly. Crowdfunding is but a complement to its overall budget, adding to other financial support” concluded Serge Hayat, Co-founder of PeopleForCinema, President of Cinemage, and co-president of ESSEC business school’s Chaire Média & Entertainment.

- The creative process, tackled by the creator, remains a precarious endeavor. Prefunding systems do exist, principally in the film industry, and have proven their ability to diversify content and ensure a variety of actors. Some original initiatives stemming from financial institutions such as Neuflize OBC Bank, help stimulate new investors: “Société d’Investissement à Capital Risque (Sicar) is dedicated to funding French cinema, declares Anne Flamant, Head of Banque Neuflize OBC’s film and audiovisual department, and is able to respond to investors’ need to alter their funding practices; private equity stands as a desirable alternative. However, this system cannot replace traditional funding. Our goal was to obtain 25 million euros; 20 million will be obtained”.

The diminishment of traditional cultural investors will have to be counter-balanced by a system that encourages new investors to give. The system used by the video game industry – a minority pays to ensure free access for the majority – is not applicable in other sectors. Greater attention must be paid to music (albums), book, and film industries. “The battle against illegal downloading is of upmost importance, concluded Nicolas Seydoux, President of the Forum d’Avignon. The devices provided by the largest tech companies should not be catch-all appliances that replace the works of art we have already created. We owe it to ourselves to constantly innovate. And if innovating becomes more complicated than expected, then we should turn to partners who can help us complete our projects”.


For Further Information: synopsis on the Kurt Salmon investigation (PDF)


Coming up in November, 2013: The complete Kurt Salmon investigation centered on the theme “Consumers, creators, distributors, audiences… who detains cultural power?” will put forth the evolution of the power dynamics between stakeholders in a given sector, will track new trends, and will propose new reflection paths to guarantee plurality and diversity in the cultural and creative sectors. The document will be available in its entirety during the annual Forum d’Avignon encounters held November 21st through November 23rd, as well as on the Forum d’Avignon and Kurt Salmon’s websites.   


[1] Conducted in April, 2007, surveying 4 000 participants from France, the United States, China, and India