Structural Characteristic of the CIN: Seeing from the Views of

‘Cross-Industry Networks’

In this section, I will move on to reveal the networking characteristics of the independent producers with those content-related businesses in Taiwan. Despite my empirical data showing that their CIN practice are partly a result of the fragmenting film industry, and hence a case-by-case practices, my purpose here, by showing views from both sides as to what CIN means to them, is to draw out some prominent micro-level dynamics, which characterise the network phenomenon under study.

Views from the Independent Producers

When asked about how they would define the ‘cross-industry networks’ of their film productions, most interviewed producers immediately commented on the undercapitalized reality of the production sector, and their networking practices are therefore mainly motivated to acquire cash injections into productions, or to minimize their production costs by seeking corporate investment or sponsorships.

In addition, with the hope of driving the box-office momentum, and to draw vertical sales interests of DVD and cable TV etc, it has become a rather common practice for the producers to develop the market-driven networks, i.e. horizontal business relationships with the book publisher, record company, telecom, new media and retail businesses, to develop all sorts of by-products such as script novels, original sound tracks albums, down-loads and merchandising products. As a first–time producer indicated,

CIN relationships are crucial to us, not only because they concern our funding and investment status, but also those by-products developed with those related businesses can be the promotional vehicles for our film as they will be launched weeks ahead of the screening. In doing so, we hope that they could attract more interest from different, yet related markets to the box-office, which is the most crucial for us as it concerns the successive sales... (Interview 7/A6)

Consequently it was found that most producers considered the vertical networks as the primary ‘sales relationship’ as they concern funding and investment sources, including those from the TV and DVD sectors. However, those sales relationships are often one-off and unpleasant, involving the independent producers being forced to sell their content at a low price, with little chance for negotiation. The interviewees were therefore found not to be keen to comment much on this aspect.

Meanwhile the horizontal networks, such as the collaborations with the book publishing, music, new media and even telecom businesses are considered by those producers as the secondary ‘partners relationship’ associated mainly with joint-promotion. In particular, I found that most interviewed producers were relatively positive, and tended to give details of such ‘partnerships’, which are regarded as built on mutual interests, personal interaction, or a shared purpose of expanding new markets, and most importantly, the opportunity to fulfill a sense of being creative producers. For example, a senior film/TV producer and another first-time film producer both commented that:

By networking with these content businesses, we might gain different views on our production and its potential market, and even some interesting business opportunities. It’s helpful in terms of our survival and creativity. (Interview 19/A2)

The credit exposure on different medium is helpful in promoting our profiles as a creative content- producer. It might be more valuable to us than just sharing a tiny amount of revenue from the by-product sales. (Interview 6/A11)

However, while some interviewed producers complained that most revenue-sharing deals were unfair due to their weaker negotiation power, in general, they were also found not to be articulate and spontaneous talking about the contracting issues. In fact it is evident from my empirical data that most independent producers did not have much experience and knowledge about how content licensing could work in practice, as a result, they were not able to negotiate in their favor in terms of the division of profits, tasks and obligations, which have become a major problem to cause unsatisfactory CIN relationships. As an expert and a senior producer concurred in their interviews that the

producers’ lacks of the IPR management and negotiation ability have become major problems to cause unsatisfactory relationships. As the following examples show:

Ideally, those vertical and horizontal relationships were supposed to achieve a synergy in terms of the content business; however whether we are taking a film as the core, to exploit its content-related values, to generate more income for those businesses, or using them as marketing tools so as to strengthen the core value of the film, so far in Taiwan we haven’t seen one successful CIN case based on a good rights management practice. (Interview 4/A7)

It might be because we were a bit desperate to get resources from other businesses, but mainly because we did not have a producer who has the know-how to negotiate with them so as to make full use of their resources, but without over-promising them what we could offer. So, in the end it’s like getting half the result with too much effort. (Interview 21/A23)

Such circumstance highlights the significance of the producers’ roles as considered by both sides. For independent producers, they pointed out that it all depends on how savvy the producers are to act as intermediaries, facilitating and smoothing the conflicts and difficulties involved during the process. Correspondingly, in cases where the producers’ roles were more active in the relationships, both sides tend to be more pleased with their collaborations, even if the outcome was not satisfactory in commercial terms, or required more efforts during the processes.

Views from the Content-related Businesses

From the point of view of content-related businesses, it became clear from my empirical data that collaborating with independent producers offered them a means to get to know the logic of creative content-making, and also new access to

potential markets. While most interviewed managers indicated that poor performance of local production has pushed off most rational investors who base their decisions on the calculation of return on investment; however, it was found that personal interests, preference or aspiration for films, content and cultural business were abundant with the decision-makers of the related businesses, which proved to be crucial in shaping the possibility and prospect of their relationships with independent producers. However, their interests in collaborating with independent productions were found to be vulnerable, depending on whether the producers could resolve the potential problems in the relationship. A vivid example may be seen in the CEO of a DVD manufacturer-turned film/TV investor suddenly becoming emotional when talking about his experiences in investing and collaborating with independent producers. He replied, in English, that:

It is an unfair treatment of the investors! The independent producers only take me as a cash machine! I have been receiving quite a few film proposals which were simply trying to cheat me. I felt much hurt and I told myself that it is a long learning curve for me to know about how to work with and invest on the independent producers, those creative and artists, and most importantly, how to find producers with a business sense that I can truly trust! (Interview 31/A19) The issue with the producers brings out the fact that the process of collaboration also has a major impact on how these businesses evaluate their relationships. From the point of view of independent producers, although it was found that their experience in managing their network relationships varied, yet the common problem identified by themselves was that mainly due to the lack of planning and specialized personnel, the developing process of their CIN is therefore highly fragmented, opportunistic and individualized. Correspondingly, from the other side, most interviewed managers also found that the relatively disorganized and

elusive business practices of the independent producers were the major problem in making an effective collaboration. The following comment made by the vice-president of an established book publisher, with twenty-five years in publishing, and has been collaborating with several independent productions, and the marketing director of a leading telecom business in Taiwan, who recently became a major sponsor of local productions, provide good examples of this point:

Those filmmakers are just unmanageable; they don’t play by the rules of publishing. I mean they do not respect our profession at all and only take us as someone to do the marketing for them. The problem is mostly the planning period for any by-product books is simply too short and insufficient to guarantee good quality, let alone to achieve mutual satisfying outcome!(Interview 40/A5)

I have found it’s inevitable that the independent producers would simply disappear for a couple of months for their production shootings, and suddenly they will show up again, asking for money. That’s why we have the three-staged payment rule in our contract; the producers can only get the money when they deliver step by step of what we requested. It just follows exactly the same procedure as how we control our ‘procurement of services’ in general. It is so far the only solution we could come up with to deal with them, as we have no idea how to monitor their production progress or how to assess the quality of the content they produced. (Interview 32/A3)

The above examples suggest a fundamental ‘culture clash’ between those disorganized and essentially hand-to-mouth entrepreneurs and the established businesses which are driven by rational and risk-averse corporate disciplines. Likewise, although my empirical data shows that the producers’ personal contacts is the key to opening up the CIN relationship in terms of getting quicker access to and response from the decision-makers of the related businesses, unsuccessful collaborations were still abundant which underline the greater complexity and

even conflicts involved in their relationships. The following failed collaboration between an independent producer and a telecom business, for example, illustrates this point, as the producer and the branding manager elaborated in their interviews that:

We both decided to do some co-promotion events, and we broke down the jobs, but in the end, they were just too slow to collaborate. It was very frustrating because for us, timing was everything, and we only had one chance to promote the film to drive the momentum for the first-weekend box-office, but for them, they probably got a whole season to promote their products.(Interview 6/A4)

I felt very sorry for the producer. We are friends and we thought we could collaborate on the production to promote the film as well as our brand, so we two initiated the whole thing. But because it required a cross-department collaboration within my company to deliver any branding event, and the producer was just not able to give us a clear idea of what she wanted to do to promote the film, and when she finally rang me up with the idea, it was already very close to the screening schedule, and we simply could not respond to her as quickly as she expected. It put me in an awkward position as I genuinely would like to help her out as a friend but I could not control the decision-making process with other departments beyond my command… (Interview 36/A1)

As for those cases where business relationships were relatively more formally structured and well-managed, they still tended to be short-lived. Such short-term practice from the perspective of content-related business echoes the independent producers’ negative views about the effects of the CIN in that they were only temporary ‘tie-ups’ and not ‘integrated partnerships’. However, according to the interviewed managers, this was mainly due to the underperformance of the independent productions in recent years, they therefore tend to use smaller stakes including product sponsorships or co-promotional collaborations for a ‘try-out’ to collaborate with creative producers. As a result, in general, it is found that the current CIN around the independent productions are relatively short-termed, and

has yet become a significant part for those content-related businesses.

Section Summary

According to the above discussion on the broader level of CIN phenomenon of the AVS in Taiwan, it is clear that while the fragmentation of the film industry can be explained by contributory factors such as policy and markets, they fall short of accounting for the individualistic, opportunistic, and to some extent experimental and arbitrary CIN behaviors around independent film productions.

In terms of the structural characteristics of the film industry, interviewees shared surprisingly consistent opinions, which were found to be largely in line with the findings from the secondary data. Historically, the film industry in Taiwan has developed as a fragmented, undercapitalized, and production-led cottage industry- over-dependent on national funding, with sluggish growth and no stable domestic base, resulting in a fragmented production sector. As a consequence, the interrelated structural impact on the AVS was that there is an increasing network taking place and extending from independent productions, which are largely individual-driven. However, based on the sector-level analysis, it becomes evident that despite the economic insignificance of the independent production and the elusiveness of its influence on the integration of the AVS, it is still proved to play an important role in the network phenomenon for several reasons. Such findings are revealed not only by the independent producers themselves but also by those content-related businesses with whom they seek to collaborate.

independent productions in Taiwan cannot be defined within clear boundaries; instead they can be dynamically related to many other industries in the sector. Additionally, although it is difficult to find official statistics specific to the integrating AVS, according to my interview data, it can be said that the independent productions contribute towards establishing cross-sector collaborations. In particular, personal relationships and self-driven practices are two important ways for the independent producers to connect with those related businesses, and enable their networks to develop a process of self-organizing interaction. It can, therefore, be argued that closer and dynamic relationships have started to emerge at the micro-level of the sector.

Specifically, the sector-level analysis shows that the CIN that extend from the independent productions include different kinds of relationships, for each involves different depth and intensity of interrelatedness, those ties are partly based on the nature and strategies of the related businesses but more importantly depending on the motivations and attitudes of the decision-makers involved. As a consequence, while independent film productions are moving into a broader context, there is a shift from the director-centred film production practices to more producer-led CIN activities, and a shift from creative collaboration to short-term commercial partnerships, which tend to be largely one-off. In particular, such change not only highlights that the dynamics and extension of the independent productions’ CIN relationships cannot be ignored simply due to the micro size of the productions, it also underlines the complexities that needed to be dealt with during the process of the CIN collaborations.

Additionally, while the secondary data reveals that specific regulations are still underway, it is evident that the Taiwanese government has been showing a technically-driven approach to encouraging an integrated AVS. In practice however, according to my empirical findings, the approach is still problematic and unrealistic. Such a finding not only goes against the government’s overemphasis on the technical aspects of the integration, importantly it supports my argument that the CIN of the AVS do involve a web of interconnections at the micro-level, and the relationship-oriented questions have emerged as the characteristics of the CIN phenomenon.

Overall, my empirical findings on the sector-level offer a direction for a further bottom-up study of the CIN, in that they show the individualistic aspect of the network dynamics at micro-level is important. It enables the independent productions to revolve actively around various content-related businesses, and there is a need to examine the evolutionary process of their networks. Additionally the findings concerning the roles of the producers provide a good foundation and starting point for the second part of the study on Taiwan, the bottom-up and multi-level analysis, which is presented in following sections.