Marty Shindler, CEO of The Shindler Perspective, Inc. was one of the featured speakers at the November Digital Content @ Convergence Conference sponsored by the KIPA – Korea IT Industry Promotion Agency. His topic was Global Trends in Digital Content Production and Distribution.

Following the conference, Peter Song of CGLand conducted an online interview with Mr. Shindler in order to provide its readers with some of his insight as well as some of the content from the conference.

CGLand | How did you first become interested in and involved in monitoring trends in digital content production and distribution?

Shindler | At various time during my career I have been in financial roles as well as marketing roles at companies. Financial roles came first at companies such as 20th Century Fox and Lucasfilm/Industrial Light & Magic and in the entertainment practice at Coopers & Lybrand (PriceWaterhouseCoopers) where my client base included a wide range of entertainment companies. In those roles, it was important to track the technology in order to track where the respective companies and the industries were going in order to properly assess the company’s position in the industry and in strategic planning. This enabled me to be involved in a marketing role at a Kodak start-up, a unique role for someone who once worked in finance.

CGLand | How did that lead to the work in which you are involved today?

Shindler | Over ten years ago while still in the Kodak/Cinesite marketing role, at a time when the world was rapidly evolving from analog to digital, I saw a market niche that was not being filled, a market need for someone who could offer consulting/professional services to the multitude of entrepreneurially driven creative and technology companies that were really good at what they did, but did not always have some of the business skills needed to enable them to grow their companies effectively. In early 1996, I decided to take a leap of faith and set up a consulting practice. These days our practice has grown to a point where we service a wide range of companies in a number of practice areas.

CGLand | What trends do you see today that are most prevalent?

Shindler | Overall, we are headed toward the next generation of consumer entertainment, driven by the confluence of consumer demand, a maturing digital pipeline and economic realities. The fact is that global content buying patterns are changing and content production and distribution patterns will be changing to meet the challenge.

CGLand | How will this impact the CGLand readers?

Shindler | Digital tools such as those in use by CGLand readers enable both the novice and the expert to create product quickly and easily. Other digital tools, such as those that are internet based, are enabling the independent creator to distribute work easily. Distribution leads to the ways that we watch content and when various trends are multiplied by millions of people, a paradigm shift is created.

CGLand | Is this going on globally?

Shindler | Yes, there are a lot of countries such as Korea that are already experiencing the changes that others will see in a couple of years due to the sophisticated technology in place. However, the global affect will be driven from a content point of view from Hollywood since Hollywood content is still the dominant factor globally today. That content will rely heavily on technology from Korea, the US, Japan and a few other countries.

CGLand | Is this being pushed by technology only?

Shindler | No, not entirely as economic realities in the marketplace are also affecting the market dramatically, especially as theatrical box office is declining in total value as well as in number of tickets sold in many countries, while concurrently the home entertainment industry is not experiencing the high growth rates present even a couple of years ago. This provides an economic incentive to the studios and others who make content available to enhance their revenue.

CGLand | Will Hollywood content continue to dominate?

Shindler | It will for quite some time due to the financing infrastructure that is in place, especially at the major studios and the fact that the US is the single largest country for sale of content. However, that said, the production of a lot of Hollywood content is being done around the world in a lot of countries where there are not only talented artists and film makers, and where there are also production incentives designed to attract productions while offering a lower cost structure than what is found in the US.

CGLand | What are those countries?

Shindler | Production has long gone to countries such as Canada, Australia, New Zealand and Western Europe, such as the UK. In the not too distant past, a lot of the ink and paint and in-between work for traditional 2D animation were done in Korea. Those skills are the foundation for the some of the cool animation I was able to see in visiting Korean companies while attending the conference. Today, there is a lot of production being done in Eastern Europe, China and India. This includes both the live action work and the digital animation/visual effects.

CGLand | Where is Korea in this equation in your opinion, today?

Shindler | Korea today is the home of many CG based animation companies, developing product for games and TV as well as in feature films. The fast growing Asia markets have created a lot of opportunities for Korean companies, opportunities in addition to the US and European markets. I expect to see feature length CG animation being done in Korea and distributed globally in the next year or so as demand for computer animated features will continue to rise. There is also a lot of local content being produced in various locales as the population base can support the cost such as in Bollywood. This will spread in the coming years.

CGLand | You mentioned Korea’s technology a few minutes ago. Please expand your comments.

Shindler | Korea has been creating next generation technology that will fuel the content distribution growth. S-DMB and T-DMB are going to have a disruptive impact as this paradigm shift takes place. The data gathered on Korea’s high penetration of broadband will provide the global content producers with the information to better understand what consumers will buy for content over broadband.

CGLand | Where else will Korea’s technology companies benefit?

Shindler | Display technologies designed and created in Korea are having a profound affect on the ways that content is viewed. For example, the roll out of HDTV is now becoming a reality, with Korea companies such as Samsung and LG gaining significant market share in the sale of HDTVs. Furthermore, and perhaps more importantly, I saw some very cool animation and other content on mobile phones while I was in Seoul, a trend that is part of the paradigm shift.

CGLand | Back to trends – what single trend do you think will have the most impact in the coming year?

Shindler | Indicative of the change in buying patterns for content, 2006 is very likely to be the year of video on demand (VOD), a concept that has been on the horizon for many years, but the technology tools coupled with consumers’ desires for anywhere, anytime content and the number of users finally reaching critical mass will enable this technology to have a significant impact this year and into the future.

CGLand | What other trends will impact the Korean CG industry?

Shindler | One of the interesting trends is in outsourcing. One of our current consulting clients, RenderCore, started in Seoul and then set up shop in Los Angeles to provide remote, on-demand rendering services for the CG and animation industries. No one ever has enough rendering power in house, so a company such as RenderCore enables CG companies to spend their capital expenditure budget on the areas where it can yield the most value, its people and the tools they use to create the animation. With broadband penetration, it is not any more difficult to send a file across a campus for rendering than it is to send a file to RenderCore’s servers in LA.

CGLand | What about the trend in digital cinema that you spoke about at the conference?

Shindler | Digital cinema is one very important trend that has also been on the horizon for many years, but has not developed a viable market until now. With digital cinema beginning a large roll out in the US, UK and other countries, including Korea where MegaBox announced a few months ago that it will be installing 50 systems in its Seoul theaters, new opportunities will be available for the independent film maker. This will enable the independent to take advantage of the digital pipeline to produce and distribute content.

CGLand | Will the deployment of digital cinema have an economic benefit to content creators other than savings on print costs and distribution?

Shindler | Yes, as the digital systems will enable the exhibitors to present in 3D stereo. This will open up the theaters to a new presentation system that hopefully will bring people back to the theaters in large numbers. Animation will be at the forefront initially, although 3D live action will follow before too long. Disney released Chicken Little in approximately 85 theaters in the US in November and will release at least one more feature film in 3D in 2006. At least 6 films will be released in 3D in 2006.

CGLand | Will this only be for movies?

Shindler | In addition to movies, 3D content will include live sporting events and concerts. Furthermore, in a relatively short period of time, 3D systems in the home will provide additional revenue streams to content producers. Video game development and production, a big industry in Korea, will benefit from this shift in the display technology.

CGLand | It seems we have only scratched the surface with the topics you covered in your presentation, but that is all we have time for now.

Shindler | It is an exciting time for those involved in digital content production and distribution. The next few years will see profound changes. If your readers are interested in a PDF of the presentation made at KIPA, they should visit our web site at iShindler.com where they may request one.

CGLand | Thanks for taking the time for this interview.

Shindler | Thanks for your time in conducting the interview and in publishing it.