Information Systems Department London School of Economics and Political Science University of London
Course title IS499 Summer Dissertation
Student number 968326
Title of assignment Dissertation project report
Date of submission 1 September 2000
Hardware used (Computer: type, make and model; Printer: type, make and model; any further relevant information) Toshiba Portégé 3020CT and IBM (LSE standard) PCs. LSE standard laser printers.
Software used (operating system and application packages: give version numbers) Microsoft Office 2000 (Word and Excel). ABC Flowcharter 3.0. IBM ViaVoice Millennium Edition voice recognition software.
Any limitations in hardware or software that you would like the examiners to take into account None
Declaration to be signed by the student
I have read and understood the guidelines and agree to abide by them.
I declare that this work, submitted as part of the requirement for the above course, is my own and that I have acknowledged any use of the published or unpublished work, in any format, of other people.
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The challenges for Sohonet: A stakeholder analysis of a digital network system.
Abstract
This essay presents an analysis of Sohonet, a digital network used primarily by film and broadcasting postproduction companies located in Soho, London. Some observers argue that Sohonet has been, and will continue to be, a successful information system that shows that the relatively small production companies in London can forget their rivalries and work as comrades when needed. The argument set forth in this essay, however, is that despite its promising start, Sohonet could face serious challenges in the future. The sources of these challenges are found mostly in a wider interorganisational context, and are often rooted in cultural and political issues rather than technical ones. This paper identifies these challenges, and the associated potential problems, and shows how they may influence the future development of Sohonet. The argument is supported by an analysis of the factors that are currently shaping the use of the Sohonet network. The potential challenges are identified through identification of Sohonet’s stakeholders and their perceptions, and by relating these to the context in which they originate. A prediction is made as to what a likely future development scenario might be for Sohonet. In the final chapters, conclusions are presented followed by reflections on the research process.
Keywords: Sohonet, network, film and broadcasting, visual effects, stakeholders, context, perception, culture.
Acknowledgements
I would like to give special thanks to the following people for their support, insight and guidance given to me during the preparation of this paper:
The people in the organisations I interviewed, some of who asked to remain anonymous.
Mr. Jon Ferguy, Head of Technology at Sohonet.
Mr. Richard Holford, Head of IT at the British Film Institute.
Mr. Jonathan Warner, IT-Manager at The Mill.
Mr. Gareth Wredden, Managing Director at Sohonet.
Dr. Steve Smithson, Head of the Information Systems Department at the London School of Economics, and my dissertation supervisor.
Dr. Edgar Whitley, Senior Lecturer of Information Systems at the London School of Economics.
Mr. Juan Palacios, Mr. Coen Ching, and Ms. Sue Barclay, and the rest of my fellow ADMIS-students at LSE.
And to those of you not mentioned here, but whom I love and respect immeasurably: Thanks for putting up with me during this busy period. Table of contents
1. INTRODUCTION ...... 1
2 CONCEPTUAL FRAMEWORK AND RESEARCH METHODOLOGY...... 4
2.1. STAKEHOLDER THEORY...... 4 2.2. RESEARCH METHODOLOGY...... 6 3. THE CONTEXT IN WHICH SOHONET EXCISTS...... 8
3.1. THE BRITISH FILM INDUSTRY...... 8 3.2. THE BRITISH VISUAL EFFECTS INDUSTRY ...... 12 4. IDENTIFYING SOHONET STAKEHOLDERS AND THEIR PERCEPTIONS...... 16
4.1. SOHONET STAKEHOLDERS ...... 17 4.2. A SUMMARY OF THE CURRENT PERCEPTIONS OF SOHONET...... 23 5. POSSIBLE FUTURE SCENARIOS FOR SOHONET...... 27
5.1. SCENARIO 1: REMAIN AS CURRENTLY IMPLEMENTED...... 28 5.2. SCENARIO 2: A UK-BASED NETWORK FOR ANY TYPE OF DIGITAL CONTENT...... 29 5.3. SCENARIO 3: A GLOBAL NETWORK FOR VISUAL EFFECTS CONTENT...... 32 6. SUMMARY AND CONCLUSION ...... 35
6.1. CONCLUSION ...... 35 6.2. REFLECTIONS ...... 36 REFERENCES ...... 38
APPENDIXES ...... 42
APPENDIX A: LIST OF QUESTIONS USED AS A GUIDE DURING INTERVIEWS...... 43 Glossary
There are many different interpretations and definitions of the area of film making known as visual effects - special effects, digital effects, etc. To avoid confusion throughout the rest of this paper, and to explain the differences, here is a glossary (Scammell 1999):
Special Effects - Image enhancements that are an obvious and intentional manipulation of the original image - as well as surrealistic effects these include explosions, destroying cities, aliens, animation.
Digital Effects - This is a recent term used to apply to any manipulation carried out specifically on a piece of equipment that works with digitised film. Physical effects - Models, explosions, prosthetics - any change in the environment that is then photographed.
Compositing - the process of putting together two or more images to make one. Generally carried out on digital equipment it is often called digital compositing.
CGI - This refers to “Computer Generated Imaging”. Often incorrectly used to refer to any digital image manipulation, more correctly it means images that have been born inside a computer, as opposed to 'real' images that are manipulated by a computer. Examples: dinosaurs in Jurassic Park, metal man in Terminator 2.
Visual effects - anything that produces an image than cannot be seen naturally. These include effects that should never be seen as effects - removing telegraph poles, enhancing the sky, superimposing models etc. Note that visual effects encompass all of the above terms, and include a broad set of skills from model makers, through animation, to creature shops, prosthetics, to digital compositing and CGI.
Post-Production - The literal meaning is “all the work carried out after principal photography.” In the film business historically this was the editing and sound dubbing. In the television world for many years post-production has also included the visual effects that have been predominant in TV commercials for about 20 years. Many of these companies are now making a successful move into visual effects for feature films. Visual effects are often described as part of the film post-production process, although this is rarely the case these days (Neale and Smith 1998). Particularly CGI work may be the first part of the film to start work, often in research, and other visual effects may be part of the overall production process. Some studios retain the origins of this work by keeping it under post-production, others now place control of this work under production, and others have a completely separate department. However, generically visual effects are still known as part of “post-production”. 1. Introduction
”Our industry is in a unique position, on the threshold of a technological revolution that once was the stuff of dreams. With strong links to both Europe and the US, it provides us with an extraordinary opportunity for substantial growth and lasting success. We cannot claim to have all the answers - it is just the beginning. But it's time for all of us in the film industry, and those that comment on it, to honestly face up to the realities and then perhaps we have a chance of realising our dreams.”
Alan Parker, British film director and Chairman of the British Film Council.
The entertainment industry is currently experiencing a period where its market is growing at a very rapid rate (Kaufman 1998). This is true with regards to its size, reach and popularity. At the same time, new technology is being used to break down the distinctions between long- established types of industries, and establishing new ones (Springel 1998). An example of this is the convergence of the television, computer and telecommunications industries, as exemplified by the recent merger between the American corporations America Online Inc. and Time Warner Inc.
Over the past few decades, observers have criticised the international film industry for missing the opportunities that have come along with the introduction of new types of information technology (Finney 1996), (Deakin and Pratten 1999). In the 1970’s, it was slow to see the possibilities of cable distribution, and then scrambled to catch up with companies such as HBO. Next, it was described as surrendering the video-rental market to the likes of Blockbuster Inc. Currently, as the Internet starts to become a global media platform, it allows organisations such as Yahoo! Inc. and America Online Inc. to beat it at building the first portals with internationally relevant entertainment content and reach (Coy, et al. 2000).
The British film industry is considered a significant player on both a domestic and international level (Emerson 1999). Just as the film industry at large, it has in the past been criticised for showing an unconvincing willingness to cease opportunities that have presented themselves in the form of new information technologies, and for having each individual organisation fending for itself without trying to co-operate with others (Finney 1996), (Deakin and Pratten 1999). Even the industry itself has been worried that what it calls the “cottage-nature” of the industry
1 in Britain would mean that film production would take place without the scale to spread financial risk amongst its individual organisations (Kaufman 1995).
Currently, however, there are efforts underway with the goal of building a stronger British film industry, and to ensure that it remains vital and dynamic as new technological possibilities come along. Some of these initiatives come through the recently established British Film Council (Moyes 2000), while others are sponsored and promoted by private organisations, such as production studios and distribution companies (Finney 1996). According to many observers, some of the most promising efforts in this regard are being made in what is known as the visual effects industry. Visual effects are said to be the fastest growing part of the film making process in terms of size and income, and the UK is considered to be very strong creatively and competitively in this segment of the film industry (Scammell 1999). Most of the British visual effects companies are situated in central London, mainly in Soho.
Central London is also where the core users of the Sohonet digital network are situated. Sohonet Ltd is a specialised Internet/network service provider, which currently offers the media industry high-speed transfer of data, film, video and sound content. The company’s clients range from London’s leading post-production facility providers, through advertising agencies to Internet service companies and software designers. The company and network was originally set up by representatives from visual effects organisations in the central London area.
According to Boudry (2000) and Scammell (1999), the creators and users of Sohonet have shown that is it possible to put commercial rivalries aside and work together if the common goal is worthwhile. They argue that although there is no single company in London to rival the size of the American visual arts companies Industrial Light and Magic (ILM) or Digital Domain, there is an enormous capacity and capability, spread out among several digital effects houses. Sohonet, they claim, has made it both physically and politically easier to offer the capacity to very large projects as a sort of large virtual facility, which can be custom-built to meet the needs of any production.
Observers from both within (Scammell 1999) and outside the film industry maintain that Sohonet will be a success in the years to come, and that it will enable the British visual effects industry to compete with its American competitors.
2 This paper, however, puts forth the argument that despite its promising start, Sohonet could face serious challenges in the future that may possibly put its future success in jeopardy. The sources of these challenges are found mostly in a wider interorganisational context, and are often rooted in cultural and political issues rather than technical ones. The aim of this paper is to identify these challenges and show how they may influence the future development of Sohonet. The main argument will be supported by an analysis of the factors that are currently shaping the use of the Sohonet network. The potential challenges and problems will be pointed out through identification of Sohonet’s stakeholders and their perceptions, and by relating these to the context in which they originate.
The essay is structured as follows: In the next chapter is a description of the conceptual framework and research methodology used for this research project. Chapter three describes the context in which Sohonet currently operates. Sohonet’s current stakeholders and their perceptions are identified in chapter four, which concludes with a summarised description of the perceptions of these stakeholders. Based on this, chapter five contains descriptions of a set of possible scenarios that the future development of Sohonet may follow, including assessments of who the related stakeholders would be. The chapter concludes with a judgement of which of the scenarios is the most likely to come true. Finally, in chapter six is a conclusion with a summary of the research findings and reflections on the research that has been carried out.
3 2 Conceptual framework and research methodology. 2.1. Stakeholder theory. In order to analyse how the Sohonet network might develop in the future, it is necessary to look beyond the borders of the Sohonet Ltd organisation itself. Indeed, it is necessary to look beyond the borders of Sohonet Ltd and its users and suppliers, because there are entities outside this group that could influence, and be influenced by, the Sohonet digital network system. Pouloudi and Whitley’s (2000) stakeholder identification approach was therefore used as a framework for the analysis. This approach's understanding of the term stakeholder is based on Freeman’s (1984) definition, where a stakeholder in an organisation is any group or individual who can affect or is affected by the achievement of the organisation's objectives. Pouloudi and Whitley’s approach examines the concept of stakeholding in an interorganisational systems context and therefore moves beyond the borders of individual organisations, which is the limitation of most references to stakeholders in the information systems literature (Pouloudi 1999). This paper considers specifically individuals, groups and organisations that can affect or be affected by Sohonet (Pouloudi and Whitley 1997).
Donaldson and Preston (1995) argue that stakeholder theory can be used in a number of ways. Specifically, they identify a descriptive, an instrumental and a normative aspect of stakeholder theory to help understand and classify stakeholder theory. According to them:
1. Stakeholder theory is descriptive in the sense that it describes the corporation as a constellation of co-operative and competitive interests processing intrinsic value. 2. Stakeholder theory is instrumental because it establishes a framework for examining the connections, if any, between the practice of stakeholder management and the achievement of their various corporate performance goals. 3. Finally, “the fundamental basis” of stakeholder theory is normative and involves acceptance of the following ideas: “stakeholders are persons or groups with legitimate interests in procedural and/or substantive aspects of corporate activity” and “the interests of all stakeholders are of intrinsic value.”
With these three aspects in mind, the analysis performed in this paper is mostly descriptive, but also to a certain extent instrumental. According to Pouloudi (1999), descriptive approaches typically serve an instrumental research purpose and as a result their descriptive and instrumental aspects may be inseparable.
4 The analysis follows an interpretive stakeholder research approach. This approach, with its emphasis on context, lead to the identification of a broad set of stakeholders and resulted in an understanding of the stakeholders viewpoints as well as the context within which these viewpoints are shaped (Pouloudi and Whitley 2000). At the core of the analysis is the identification of stakeholders and the context in which they operate. The analysis process is not performed independent of the stakeholder identification since stakeholders have views about who the other stakeholders are (Pouloudi 1999).
Pouloudi and Whitley provide three main guidelines for stakeholder identification. First, stakeholder identification needs to be a dynamic process, that this, one that can afford the instability and uncertainty organisational reality and in particular the entrance of new stakeholders, the emergence of new stakeholder types, the change of stakeholder roles as well as the exit of existing stakeholders. Second, stakeholder identification should be an iterative process, so that when as stakeholder points to further stakeholders the roles of the latter are investigated. Third, stakeholder identification should be an interpretive process; that is one that pays attention to different perceptions about who the stakeholders and their roles are and one that follows the changes in these perceptions.
Pouloudi and Whitley also present seven principles that characterise stakeholder behaviour. These principles, which were used in the preparation of this paper as the basis for the identification of stakeholders, are summarised in the table below.
No. Principle of stakeholder behaviour 1 The set and number of stakeholders are context and time dependent 2 Stakeholders are interrelated 3 A stakeholder’s role may change over time 4 Stakeholders may have multiple roles 5 Different stakeholders may have different perspectives and wishes 6 The viewpoints and wishes of stakeholders may change over time 7 Stakeholders may be unable to serve their interests or realise their wishes
Table 1. Principles of stakeholder behaviour. (From Pouloudi and Whitley (2000))
5 With the above principles as a guide, initial interviews were carried out with representatives from organisations that were considered to be core stakeholders. As a result of these initial interviews, new potential stakeholders were identified. This is in line with the principles’ emphasis on perceptions, context and time.
Along with the interviews, a review of relevant literature was performed. The literature review gave a supplement to the interviews in terms of identifying stakeholders. The literature review also provided additional practical information, perceptions, attitudes, plans and other features about the stakeholders and the associated contexts.
2.2. Research methodology. The method in the analysis used is generally idiographic, and concerned with data observed through a case study of the Sohonet digital network system. As stated in the previous section, the stakeholder analysis framework puts emphasis on the changes that can occur in contexts and stakeholders perceptions over time. Cornford and Smithson (1996, pp 49) similarly argue that the dimension of time is also an important aspect for most case studies in order to develop an understanding. For this case study, a combination of literature review and interviews were therefore used in order to find support for the argument raised in the introduction. The literature review provided information mostly on the historical side of the development of Sohonet and its context, while the interviews mainly provided insight into future plans and perceptions. Based on the review and interviews, the findings that are relevant to the initial argument are described, and a conclusion is drawn.
The research in this essay is influenced mostly by the anti-positivist, or interpretive, epistemology. It is characterised by a combination of facts and value-laden descriptions. The main focus is on people and the social and cultural context (Myers 1999) related to Sohonet. Furthermore, the perspective of the research is distinctively qualitative. The analysis in this paper is therefore based more on words than numbers (Cornford and Smithson 1996).
The literature chosen for the analysis fall into two broad categories: 1) The film industry, and 2) Stakeholder theory for information systems. There is available literature on these subjects that is both qualitative and quantitative in perspective. However, much of it has distinctly positivist influences, with a large portion of the available literature from both academia and the trades themselves focusing on methods-to-succeed. This type of literature was for the most part left out of the research, due to the difference in approach.
6
The core literature used in the analysis cover a wide range of topics, and originates from a broad group of participants and observers. Some of it provides thorough discussions of the context in which Sohonet is situated, including views on how the trade and government can, or should, influence the development of the British visual effects industry. Others look more closely at aspects within the visual effects industry, ranging from the use of technology to business issues.
In addition to reviewing literature, interviews were carried out with key representatives from organisations in the British visual effects, film, broadcasting and telecommunications industries, and with a representative from the UK government. The interviewees provided relevant information that went into the analysis, and also gave useful recommendations on literature they believed would add to the quality of the research.
In the following chapters, the stakeholder analysis of Sohonet is performed. First, the context in which the network system exists is described, followed by an identification of the system’s current stakeholders and their perceptions. Finally, these perceptions are summarised, and a set of possible future development scenarios for Sohonet are discussed.
7 3. The context in which Sohonet excists. 3.1. The British film industry. According to Finney (1996), the film industry is an “unstable meeting place of art and commerce, often depending on conflicting elements to fuel its progress. It is a high-tech, high- investment industry that relies on both talent and skilled labour to be successful.” He goes on to argue that the key driving forces in the industry include cultural imperatives, high-risk financial speculation, political manoeuvres and what he describes as “the magic dust of entertainment” – the creative element. The British film industry makes an important contribution to the creative and imaginative life of the UK. It also contributes to the country's international reputation, and is much admired internationally (Kaufman 1995).
However, the industry remains fragmented. It is largely made up of a number of small independent production companies. The government and others are worried that the “cottage industry” nature of the business inevitably means that most film production takes place on an individual basis and without the scale to spread financial risk.
Britain is running a large and growing trade deficit in audio-visual product, with every sign that the situation will deteriorate further unless the industry response to the opportunities before it. The industry remains largely dependent on television, producing mainly low-budget films. This diminishes its prospects in the international cinema market (Kaufman 1995) (Finney 1996).
Nonetheless, again according to the BFI, the film industry has enormous opportunities, perhaps unprecedented since the medium was invented 100 years ago. • The UK cinema audience is fast growing. • More multiplex cinemas are planned, in response to strong consumer demand. • Sales of feature films on video and other media are increasing. • The increase in the number of television channels, the prospects of video on demand and digitalisation create new demands for film projects and the possibility of greater choice for the viewers. • The British film production sector offer skills and facilities of international renown as well as the natural advantage of English language.
8 Overview of the industry The last few years have seen a marked increase in the number of films made by British producers, and a similar increase in overseas productions coming to the UK. As the following diagram shows, there is an upward trend in the number of films produced in the UK each year (Dyja 1999).
Number of films produced Trend (linear)
140
120
100
80
60 Number 40
20
0 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 Year
Figure 1. Number of films produced in the UK 1981-1998. (Data source: BFI)
However, as the next diagram shows, the average cost to produce each film has a downward trend. According to the BFI, the relationships between the growth in the number of films made and the decline in the cost of production shows the effects of an increased use of information technology as part of moviemaking. Sohonet is, in this regard, both a result of – and a catalyst for – this development within the industry.
9 Average production cost pr. film Trend (linear)
12,0
10,0
8,0
6,0 £ m 4,0
2,0
0,0 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 Year
Figure 2. Average production cost pr. film in the UK 1981-1998. (Data source: BFI)
The direct result of attracting overseas production to UK is an increase the overall level of production activity. A large scale US production such as Judge Dredd will employ as many as 200 British people for between six to nine months (Kaufman 1995). The staff employed includes a range of behind camera personnel such as camera technicians, video operators, visual effects producers, continuity and support staff, as well as in front of camera actors and extras.
Expenditure on production facilities, such as visual effects studios etc, by foreign companies visiting the UK to make films represents a significant proportion of overseas earnings by British companies. Overall, overseas earnings are on a rising trend, and in 1993 52 per cent of the £496 million earned by film companies was attributable to receipts from foreign. This shows the importance of attracting international productions.
Structure of the industry Film production in the UK can be seen to divide into two types. The first consists of high- budget, star driven pictures financed almost entirely by other large vertically integrated American companies. Because their interests include the entire general supply-chain of filmmaking (production, distribution and exhibition) these companies can not only insure that
10 their products are screened, but have also been able to develop a close and complicated relationship with the target audiences for their films. It also creates a market where the users of Sohonet can take part in projects with solid financial backing.
The second and parallel type consists of relatively low budget films made by British producers and frequently mainly financed by television, which remains the largest single source of finance for British films. Of the 49 films made in 1994, only 11 had budgets of £4 million or more. Of these, only seven had a budget of over £6 million. Within this niche, British filmmakers have increasingly come to depend on the broadcasters.
The film and broadcasting markets The market for film entertainment of all types is expanding. New technology is breaking down the distinctions between the television, computer and telecommunications industries, since they increasingly use common production distribution mechanisms and facilities (Junnarkar 1998) such as Sohonet. Their convergence creates important opportunities for the film industry as a creator and distributor of software (Bolter and Grusin 2000), (Sherman 1999). Those companies that have developed critical mass, supported by a strong capital base, will be in the strongest position to exploit this convergence of the delivery systems (Kaufman 1995).
Television broadcasting in all its forms is just part of a growing market for film, and the global market for all audio-visual products is expanding rapidly (Kaufman 1998). New technologies such as pay-per-view, CD-ROM and CD I, many of them heavily dependent on feature films, are resulting in an increase in consumer expenditure on audio-visual product generally.
The UK government believes that the independent production sector created by the establishment of Channel 4 and the introduction of an independent production quota is key to the establishment of a dynamic film and audio-visual industry (Kaufman 1995). It expects that it will be from that sector that both individuals and the companies needed to build a stronger British film sector are likely to come. This could mean that in the future, more and more of the users of Sohonet will come from this segment of the entertainment industry.
The government recognises, however, that this structure has meant that British film-makers are at a distance from those sectors which market and resell their work, whether through cinema exhibition or on video, and that this has made it difficult for producers to secure consistent
11 sources of investment finance and to establish long-term arrangements for the distribution and exhibition of their films.
Film production in the UK is generally regarded as an industry where the risks are high and the returns are volatile and unpredictable (Finney 1996). The absence of vertically integrated structures linking production to distribution and exhibition and the fact that most UK production companies are single film companies means that the profits from successful films are not, on the whole, available to cushion the losses suffered by investors in unsuccessful films. The overseas market does therefore provide vital additional business to the UK production companies. Sohonet, as an information system that enables the interaction between British and overseas organisations, hence plays a part in reducing the risks and volatility of the UK film and broadcasting industry.
3.2. The British visual effects industry Background and history The visual effects industry in the UK dates back to the 1970s, and made its name by using new technologies to put together programmes and commercials for television. Many feature film directors used these companies to make commercials. These were usually made on a low budget and with a low level of complexity. By the mid-1980s the East Coast production companies were asking if and when the technology that was currently used for television could be used when making feature films.
Despite this early initial interest, the postproduction companies were reluctant to invest when the technology eventually did become available in the early 1990s (Scammell 1999). One reason was that they perceived US companies as monopolising the visual effect industry and felt that there would not be sufficient business in the UK. Their uncertainty was heightened by Kodak Corp.'s decision to open a subsidiary of Cinesite in London. The UK companies did not feel they would be able to compete with Kodak in the new market. This despite the fact that the UK company CFC (Computer Film Company) had developed their own technology to do this work, and was one of the world leaders in this area. However, some investment by UK companies did follow, as they found that the creative skills that they were using for their TV work were essential for a film work as well. Additionally, several of the best UK creative artists working in this area were picked up by US companies. This was also true of the fresh talents from the academic institutions. At the same point in time a shake-up in the UK studios brought
12 several major film projects to the UK - Goldeneye, Mission Impossible, etc. This, in turn, created an interest in improving the UK facilities.
The relationship between the film and TV industry is very different in the UK from the US and especially Hollywood (Scammell 1999). In the UK there is extensive and frequent crossover between the two industries, while in Hollywood the expertise is usually found in one or the other. The dividing lines between the industries are, however, becoming even more blurred and is expected to continue to do so as high-definition TV (HDTV) and electronic cinema develop (Junnarkar 1998). The first signs of this occurred in the visual effects area, where many of the people working in feature film visual effects have come from TV post-production companies. In sum, the traditional close links between the UK film and TV industries should provide the UK with for an advantage in exploiting these skills.
According to Scammell (1999), budgets for British films have historically been relatively small, and there are few signs that this may change. He claims, therefore, that future opportunities are found internationally and especially in the USA. The BFI also provides information that supports this argument. According to them, of the 108 films made in the UK in 1998, 55 percent of the total production budget came from the top 7 films, and the only fully UK financed film was 7th. From this, Scammell argues that the most positive way to grow the British visual effects industry is by ensuring that most of the business is coming from productions in the USA. If so, the international links that Sohonet provides will become increasingly important to the British visual effects companies. However, it could also result in an increase in the competition to provide such international links.
Sohonet Sohonet was launched in April 1996 as the first commercial ATM wide band fibre optic network joining media-related companies in London, mainly in the Soho area. According to the company itself, the network was developed "by the media industry for the media industry” (Farrell 1996). Its rationale was to allow their industry fast access to higher resolution graphics, video as well as digital sound. Since its launch, the network has expanded by establishing a broadband link to Hollywood. Currently, this network is used to send images back and forth for approval purposes. Directors and producers in Hollywood can thereby converse with London via the video-conferencing equipment over shots which have previously been sent as low resolution files, so that approval can be given and shots discussed in so-called pre-visualisation stages, before finished shots are sent down the line from London to Los
13 Angeles (Sohonet 1997). A recent example of this type of use is the current movie Chicken Run by Aardman Animation (McKay 2000). The film was produced by Dreamworks SKG in Los Angeles in the USA, shot on location at the Aardman clay animation studios in Bristol, England, and visual effects was added by the Frame Store Group, a London-based post- production company.
Sohonet today provides a means for producers, processors and consumers to move professional quality sound and pictures. The network also supports high-speed Internet access, video- conferencing and e-mail. The following figure shows a conceptual map of the Sohonet network, depicting how the users of the network are interconnected.
Sohonet Conceptual network structure
Connected organisations in Connected Los Angeles / organisations in Hollywood London
Internet
Figure 3. Conceptual network map of Sohonet.
On their Internet site, Sohonet currently advertises the following two products: Sohonet Mongoose. Mongoose is the entry-level service. It supports data transfer at speeds up to two megabits per second. It also enables the user to access the Internet at 256 kilobit per- second. Sohonet describes the service as ideal for carrying out fast, timely reviews of work in progress, for e-mail and for offering access to the customers' own services across Sohonet. Sohonet Diablo. Diablo is the premium, high-speed service, designed mainly for post- production companies. It supports data transfer at speeds of up to 155 megabit per-second, which enables customers to transfer large quantities of data, such as film images, within
14 realistic timescales. Diablo includes Internet access at 256 kilobit per-second and supports e- mail and other communication services, in the same way as Mongoose. Sohonet describes this service as ideal for post-production companies to work on joint projects, moving content among themselves as required.
Given this description of the context in which Sohonet operates, the next chapter seeks to identify the entities that comprise the system’s stakeholders.
15 4. Identifying Sohonet stakeholders and their perceptions
In this chapter the Sohonet stakeholders are identified, and their perceptions of the Sohonet network are discussed. These perceptions are summarised at the end of the chapter, together with corresponding stakeholder maps.
The point in identifying relevant interorganisational systems stakeholders is not simply to compile a comprehensive list of stakeholders (Pouloudi 1999). It is rather too identify their views about the present and future uses of the system in question, in this case the Sohonet network system. In order to do this, literature was reviewed, and semi-structured interviews were conducted with representatives from the stakeholders identified. The answers that were given reflected the views of the stakeholder. Also, each of the stakeholders was in a position, because of direct- or in-direct involvement with the system, to identify other stakeholders with whom they interact as a result of the system.
Given the principles for identifying stakeholders, as described earlier, the following table shows the implications that each principle had on the stakeholder identification and analysis process (Pouloudi and Whitley 2000).
No. Principle of stakeholder behaviour Implications for stakeholder identification and analysis 1 The set and number of stakeholders are The stakeholder map should reflect the context and time dependent context and be reviewed over time 2 Stakeholders are interrelated Consider how stakeholders are “linked” (consider explicit and implicit relations) 3 A stakeholder’s role may change over Adopt a long-term perspective: study how time perceptions change 4 Stakeholders may have multiple roles There are different versions of the 5 Different stakeholders may have different stakeholder map to be drawn perspectives and wishes 6 The viewpoints and wishes of These different versions of the stakeholder stakeholders may change over time map should be reviewed over time 7 Stakeholders may be unable to serve their Need to consider political issues (as well interests or realize their wishes as technical, economic or other) to explain and, possibly, anticipate changes
Table 2. Implication for stakeholder identification and analysis (From Pouloudi and Whitley (2000))
The following steps were carried out in order to identify the stakeholders of Sohonet (Pouloudi and Whitley 2000): First, some of the generic groups of stakeholders were identified, mostly using the suggestions in relevant literature. These stakeholders came mainly from within the
16 broad categories of users and suppliers. Second, representatives from these initial stakeholder groups were contacted, and interviews were conducted in order to understand the stakeholder's perceptions about the environment and the perceptions of the interviewees about the use of Sohonet in the domain over time, with an emphasis on what they viewed as desirable and feasible future options. As a result of these interviews, new stakeholders were identified. Following the initial interviews, the stakeholder maps was revised and more literature was consulted. Then, the newly identified stakeholders were approached for interviews, followed by new revisions of the stakeholder maps and more literature reviewing.
4.1. Sohonet stakeholders The following stakeholder categories and stakeholders have been identified for Sohonet:
Service providers / competitors Sohonet Ltd. Sohonet Ltd is the company that provides the services for the users of the network. According to Mike Farrel (1996), the first Chairman of Sohonet Ltd, the company was originally set up as a community responsible for the production of multimedia content. He claimed that it was important to optimise the performance of the network for the specific needs of the users, and not compromise the network for technical priorities, the way a telecommunications company would do. Another important goal for the company, according to Sohonet Ltd’s current management, is to enable the collaboration of small visual effects companies in order for them to be able to compete with their large American competitors.
In summary, Sohonet Ltd’s main stated objective is, and has been since it was started, to do the following: To link the Soho facility houses together, to connect Soho facilities to their clients, to inter-link other elements of the media, and to provide a fast and reliable connection to the Internet. Sohonet Ltd can thus be said to perceive the Sohonet network as an information system for the main benefit of the visual effects companies in Soho.
In terms of future challenges for the network, and the company itself, Sohonet Ltd’s management emphasises the need to continue to be able to deliver a sufficient bandwidth and stable service for its users. Also, security- and copyright- (Berman 2000) issues are considered essential to maintain the trust of the users. Other challenges involve managing an expected growth in the market, and therefore a growth in the number of employees.
17 Domestic and international telecommunications companies, such as British Telecom, WorldCom and Cable & Wireless Communications serve two roles relative to the Sohonet network system. The first role is as a supplier of services that Sohonet needs to serve its users, such as local and transatlantic networks. The second role, one which has emerged later, is as a competitor to Sohonet in the business of delivering network services to users in the visual effects industry. One representative for a large UK telecommunications company said: “In our view, Sohonet is a provider of network technology and services. There is no reason why we should not be able to deliver the same service to the British film industry.”
Specialised Internet service providers, such as WAM!Net, serve a similar role as a competitor to Sohonet Ltd for this type of service to end-users. Some former users of Sohonet have indeed decided to switch to one such company, WAM!Net, for Internet access.
According to (Scammell 1999), the British visual effects industry is producing world-class work, but is losing many opportunities due to poor representation in the USA. Sohonet, he argues, provides an opportunity for the British visual effects community to become a world centre for this work, especially if greater co-operation can be achieved with the worldwide telecommunications companies. He also argues that the telecommunications companies see moving images as just another example of their data transfer business, while Sohonet have identified alternative commercial opportunities for the visual effects community.
Users / owners / competitors. Many of the users of the Sohonet network are also owners of the company Sohonet Ltd. This gives them a dual role as stakeholders in the system. According to Chris Lyon, director of new technology at Video Tape Recording, one of Sohonet’s users and shareholder companies, Sohonet’s approach should be to ignore the technology as much as possible and concentrate on the content. In an interview with the magazine CommunicationsWeek International in 1997, he defined the desired approach as “Forget the technology, just make all that bandwidth available. It’s terribly simple” (Scales 1997).
Digital film facilities. These companies make use of the wide bandwidth that Sohonet provide in order to move large digital film images around at reasonable speed. One user said: “This way, you can get the images directly from the disk and send them straight down the line and another facility can grab it straight onto its disk.” With the digital film frame beading typically 15 megabytes, the amount of data and a sequence of only a few seconds is far too much for
18 conventional channels such as ISDN. Another user said: “Using ISDN, it was a struggle to send images that looked good and didn’t take forever. The Sohonet link takes some of the fear out of the equation.” Sohonet’s bandwidth brings the transmission time down to a second are so per frame. Thus, for example, images scanned from physical field at one of the scanning houses in London may be delivered direct to the client special effects company over the network. Other possibilities arise when several companies are working on the same movie. Shots at various stages of completion can be passed around among the collaborators. A third user said: “This not only saves time needed to write a tape, send it to the client, and read it back again, but also avoids difficulties with incompatible tape systems. It's much the same as having all the computers in the same building, although they may in fact be scattered around Soho.” A transatlantic wide band link accessed via Sohonet has made it more acceptable for Hollywood clients to have effects work carried out in London. The link keeps them in touch with what's going on, with transfer of high-resolution images and wide band video-conferencing.
Video postproduction houses. The main use by video post-production facilities has been to allow advertising clients' to preview work in progress. An agency producer connected to Sohonet can be effectively in the edit seat without having to leave the office. This allows rapid approvals and speeds up completion.
Internet users. For many Sohonet users, the cost of connecting to Sohonet is justified by fast permanent access to the Internet. Sohonet has negotiated wide band activity via an ISP, and presents it at full bandwidth to subscribing users. This allows internet users to provide all their staff with permanent Internet access on the desktop, gives them the ability to send and receive medium-size image files via ftp to overseas clients, and keeps their webserver constantly online.
Television companies. Film production has been established in the UK for a century (Scammell 1999). An independent television production sector is a much more recent phenomenon, which owes its early development to the establishment in 1980 of Channel 4 as a broadcaster and commissioner of programmes, not a programme maker. Channel 4’s goal of encouraging innovation and experimentation in programmes has been judged a success by observers (Kaufman 1995), (Cones 1992), which the government, through to the Broadcasting Act 1990, has aimed to sustain.
19 Channel 4’s work in nurturing the independent sector has been reinforced by the 25 per cent independent production quota, first introduced on a voluntary basis, and then made a statutory requirement for both the ITV and the BBC. As a result, a large number of production companies have emerged, whose work ranges across all forms of television programming. Channel 4 has been particularly instrumental in the development of a new generation of feature film production companies that have their roots in television drama and comedy. Many of these companies have developed film interests, and consequently, there has been a convergence between film and television production in terms of the companies involved, their principal source of finance, and the people and facilities they employ. Many of the users of Sohonet cater directly, or indirectly, to the independent television sector through the production of advertisements, trailers and other visual effect – based content.
It is important to note that at least one of the original users, and founders, of Sohonet have since decided to discontinue the use of the network, but to remain as an owner. In fact, the former user/founder has decided to set up its own network service, and has as such become a competitor of Sohonet. The dual role of this stakeholder is relevant to stakeholder behavior principle 4, as shown in Table 2 earlier. In an interview given for the purpose of this paper, the company said that the main reason why it decided to leave Sohonet was that it didn’t think Sohonet provided them with the services they needed anymore. They added that they felt that Sohonet did not serve the purpose which was once intended, namely to serve as an information systems network for the Soho post-production community. In their view, the service has become too general, and does not cater to the special needs of the visual effects industry in such aspects as flexibility and applications. The other users of Sohonet were split in how they perceived Sohonet in this regard. Some expressed similar views as those expressed above, while others claimed that Sohonet was living up to the original goal for it to be a network for the visual effects industry, and that its service was good and relevant to their needs.
Government and trade organisations
The British Film Council. The Council was created to combine the activities of the British Film Institute (BFI), the British Film Commission (BFC), British Screen, BFI Production and the Arts Council of England (ACE) Lottery Film Department. One of the Film Council's tasks is the creation of a cohesive strategy for boosting the UK film industry with a responsibility to cover cultural, educational, economic and technical issues. The Council was launched in April 2000 and is run by the director Alan Parker with £145 million in funding to distribute during the first three years of operations (CBC 2000). Some of this money will go to the users of
20 Sohonet. This may, in turn, influence who these users will be and how they will choose to use the network. The Council said that they view Sohonet as an important service provider for the film and broadcasting industries, but they did not want to comment when asked if they could give their views on the future of Sohonet.
The British government. The film industry has long lobbied for tax incentives, arguing that they would help break what appears to be a cycle in the industry: periods of brief success followed by extended failure (Meyer 1997). In 1997, the government decided to introduce a 100 per cent tax write-off scheme for British films with budgets up to £15 million. Such tax relief helps improve the general financial strength of the users of Sohonet, who are among the beneficiaries of such policies. The government also claims to recognise the increasing importance of the international market for films, and the need for British filmmakers to engage in that market (Kaufman 1995). It also stated that it sees Sohonet as an important infrastructure provider for the film and broadcasting industry in the future development of this area.
The European Union. The European Commission's media 95 programme has sought to develop the European market for feature films and other audio-visual products, and has encouraged both distribution and exhibition of films. Media 95’s activities has, however, been criticised for being too diffuse for it to achieve the kind of structural changes that need to take place if the European industry is to become more competitive (Finney 1996). The British government therefore has proposed to support the European Commission's proposals that the three priority areas for the successor to the media 95 programme should be pre-production, project development, and distribution and marketing (Kaufman 1995). All these are areas where the use of Sohonet is relevant.
The US political bodies. Sohonet’s overseas link to Hollywood implies that it has to take into account the technological, cultural and political issues that go along with operating in the US market (Neale and Smith 1998). If Sohonet expands into a wider global network, additional government bodies and international organisations will have to be added to the list of Sohonet stakeholders.
Currently there is no single representative trade organisation for the British visual effects industry, nor is there one for the broader film services industry. However, there are a number of entities that collectively can be said to encompass some of the functions of a trade organisation, and should as such be considered among Sohonet’s stakeholders because they influence, and
21 are influenced by, the opinions and actions by users and suppliers of the network. The trade organisations below play a role in shaping the context in which Sohonet operates because of their role, together with the government, in maintaining policies for the film industry.
ITS - The International Teleproduction Society - is a US based trade association for companies providing technical services to the film and television industry. ITS set up a UK chapter in 1994 and represents a number of the companies carrying out television post-production work. Many of these are the same companies now working on film, however the television aspect detracts the film effects specialists companies, and the society is currently not very strong. The administration of this body is currently undertaken by PACT.
BKSTS - The Moving Image Society - has strong representation from both the film services industry and from the visual effects community, but on an individual membership basis. Financial support is from many of the major manufacturers in this field, and with a change in emphasis for the society it could be well positioned to take up this role. Over the last few years, BKSTS has worked hard to update its image (Scammell 1999).
VES - The Visual Effects Society - is a US organisation currently setting up a European operation based in the UK. Representation is by members, but with financial support from the major manufacturers. The US base could detract from support for UK industry as distinct from growing the industry world-wide.
BAFTA - Until recently, BAFTA had no real interest or activity in this part of the industry, but has now recognised its importance (Scammell 1999). BAFTA is interested in broadening its membership base.
PACT - The Producers Alliance for Cinema and Television. Currently, PACT is the strongest and most serious representative trade organisation in the audio-visual media (Scammell 1999). PACT employs a full-time staff and serves as a powerful lobbying force on behalf of film and television production companies. A potential conflict is that PACT represents the clients of the visual effects business. However the infrastructure is strong, and the links via ITS could make this attractive.
22 4.2. A summary of the current perceptions of Sohonet.
From the above analysis of the stakeholders of Sohonet, it is possible to summarise and formulate two distinctly different perceptions of what Sohonet is and what role the network and company plays in the current context of the British visual effects industry. These two perceptions are discussed in this section of the report.
4.2.1. Sohonet as a visual effects network.
This perception is close to the one shared among Sohonet itself (Farrell 1996), some of its users, the government and some of its suppliers. Common for all of these organisations is that they describe Sohonet as being more than just a technology provider, and that Sohonet adds value because of its specialised knowledge about the movie and broadcasting industry. As one of the users of Sohonet put it, “The guys at Sohonet know information technology, but they also know and understand our needs as a visual effects company. This makes it easier and less risky for us to do business with them than with a regular mainstream network provider.”
The following diagram shows a stakeholder map based on this set of stakeholder perceptions:
23 Stakeholder-map of Sohonet: = Stakeholder categories
Current perception, = Stakeholders and their role "Sohonet as a visual effects network" = Nature of relationship
Service providers Know- ledge about Users / Owners Sohonet Ltd ""A provider of netw ork services to the visual visual Digital film facilities, Internet effects industry in London. The organisation effects users, television companies has know ledge of both technology and the etc. in the UK and US. visual effects industry, and can thus deliver a "Use the netw ork to service that is specialised for this purpose." exchange digital visual effects products, email, Services videoconferencing and other industry-spesific material."
British Telecom and other general telecommunication companies. "Sub-providers of technical services to Sohonet." Exchange of digital content, email, videoconferencing, and specialised know-how of the Technical services, visual effects industry. specialised for visual effects industry The Sohonet network system
Legislation, funding technical advice and representation
Government- and trade- organisations
The UK, US and EU government. "Provide legislation and funding for organisations in the visual effects industry including Sohonet and its users".
Various trade organisations. "Provide legislation, funding and technical advice, and acts as representatives for Sohonet and its users in certain fora."
Figure 4. Stakeholder map, current perception:“Sohonet as a visual effects network”.
24 4.2.2. Sohonet as a general telecommunications network.
This perception is shared among some of Sohonet’s users, competitors and suppliers. It entails that Sohonet is a telecommunications network only, and that there little or no distinction between Sohonet Ltd and other providers of network technology services. One user put it this way: “Sohonet does not really operate as a hub for Soho film post production as once intended. Rather, they have become one small ISP among many. They are more of a telco like British Telecom, with no particular services for film post production.”
Without making any judgement on whether this view is correct or not, it at least shows that Sohonet is currently either not able to deliver the “added value” of specialised knowledge about the visual effects industry to some of its users, or it is not able to convince some of its users that they are getting this added value.
The following diagram shows a stakeholder map based on this set of stakeholder perceptions:
25 Stakeholder-map of Sohonet: = Stakeholder categories
Current context, = Stakeholders and their role "Sohonet as a telecommunications network" = Nature of relationship
Service providers / Competitors Users / Owners / Sohonet Ltd Competitors "A provider of netw ork services to the visual Digital film facilities, Internet effects industry in London. The organisation users, television companies has know ledge of technology matters only." etc. in the UK and US. "Use the netw ork to Services Competition exchange digital visual effects products, email, Comp- videoconferencing and other British Telecom and other general etition telecommunication companies. industry-spesific material." "Sub-providers of technical services to Sohonet. There is no significant difference betw een the services these companies provide and those of Sohonet Ltd." Exchange of digital content, email, videoconferencing etc. General technical services for visual effects industry The Sohonet network system
Legislation, funding technical advice and representation
Government- and trade- organisations
The UK, US and EU governments. "Provide legislation and funding for organisations in the visual effects industry including Sohonet and its users".
Various trade organisations. "Provide legislation, funding and technical advice, and acts as representatives for Sohonet and its users in certain fora."
Figure 5. Stakeholder map, current perception:“Sohonet as a telecommunications network”
26 5. Possible future scenarios for Sohonet.
Having identified the context in which Sohonet operates and the system’s stakeholders, and given the current perceptions about Sohonet, this section of the paper attempts to outline a set of possible future scenarios for the system and to make an assessment as to which of these scenarios the future development of Sohonet is most likely to follow. The three scenarios can be viewed as optional development routes for the network based on the perceptions of its stakeholders. Accompanying the discussions of scenario 2 and 3 are corresponding stakeholder maps. These maps are developed based on the ones drawn in the previous chapter for the current implementation of Sohonet, but altered to show the effects of the changes that the future could bring. As the maps drawn in chapter four are directly relevant for scenario 1, a new map has not been created for this scenario.
The scenarios below are described with an attempt to avoid the use of any type of deterministic dependencies - technological or other. The changes associated with each of the scenarios may in fact even come about from what Orlikowski (1996) calls “situated change”, whereby the changes happen through the ongoing variations that emerge frequently in the interruptions and creativeness of day-by-day activity. The scenarios should also be observed as abstract descriptions of ideal development scenarios. The actual future development of the network could possibly possess elements of more than one of the scenarios described here, and herein lies a major challenge for Sohonet Ltd, namely to decide which type of strategy it wants to adopt for the future.
Interorganisational information systems, such as the Sohonet network system, may follow different patterns of development. There are examples where those who develop the system have concentrated on gradually increasing system functionality (Pouloudi 1998) as well as cases where developers have been concentrating on a broader stakeholder involvement (Papazafeiropoulou, et al. 1999). The following diagram illustrates how the scenarios described below fit into these patterns of development:
27
Scenario 3: A global network for visual effects content
Degree of added functionality Scenario 2: A UK-based network for any type of digital Scenario 1: content Remain as currently implemented
0 Number of stakeholders involved
Figure 6. Possible scenarios for the future development of Sohonet.
5.1. Scenario 1: Remain as currently implemented.
In this scenario, the Sohonet network would in the future stay mostly within the scope of its current implementation. This would imply a strategy for Sohonet Ltd to retain its current size and type of services, which has brought it mostly success so far based on the general perception given by media, users, and the company itself. This strategy could, however, be dangerous because the context in which the system and company is situated will not remain unchanged in the future (Kalakota and Whinston 1996), (Lientz and Rea 1998) (Kaufman 1998), (Westland and Clark 1999). For example, as described earlier in this paper, Sohonet will face increased competition from general telecommunications companies such as British Telecom and from Internet service providers such as WAM!Net. It currently even faces a new type of competition from within its own group of users, who establish their own network services. The perceived camaraderie present when Sohonet was established, as discussed earlier in this paper, does not seem to characterise the general nature of collaboration among the users and owners of Sohonet anymore. All this may in the future eat sufficiently into the share of the market currently held by Sohonet Ltd, so that the company, if it remains unchanged, runs the risk of loosing to the competition that may be able to offer new and better localised services. The Sohonet network
28 system, although it may continue to be updated technologically so that it can deliver the required bandwidth to its customers, may therefore end up as just one out of many similar networks for the facilities in Soho. This would, in fact, be a business context similar to the one facing Sohonet when it was started five years ago, and which actually was the motivation behind creating the network.
In summary, this is a scenario that the future development of Sohonet is not very likely to follow, due mainly to the influence from ongoing and future changes that are anticipated to take place in the context in which the system operates. These changes will probably result in changes being made in the Sohonet system itself. If these changes are not made, the system would indeed run the risk of being unfit to survive due to the mismatch between the system and its context (Webster 1995). It is also a risky scenario in that some of the stakeholders are unwilling to collaborate (Papazafeiropoulou, et al. 1999).
5.2. Scenario 2: A UK-based network for any type of digital content.
Sohonet would here expand its scope from just serving the visual effects industry to offer its services as a network for digital transfer of data with any type of content. In this scenario, therefore, Sohonet would essentially become a regular telecommunications and Internet service provider. This would mean that the network would cater to a much larger potential customer base, and would thereby enable the future development of the network to become less dependent on the unstable collaboration of a relatively small number of users. Additionally, the users and other stakeholders would in this case come from an even wider group of industries and would therefore impose a smaller economical risk to Sohonet. The company would hence be better equipped to handle situations such as a non-systemic financial depression.
Technologically, the solutions are in place to be able to serve more users, and Sohonet already has experience in providing its services on both a local and a limited international scale. As the management in Sohonet themselves point out, growth in the available bandwidth is a critical factor to succeed even at the present level of service. This is not expected to change in the future (Kalakota and Whinston 1996), and the growing need for bandwidth is vital for Sohonet regardless of which of the scenarios the future development of the network follows.
Sohonet Ltd would, however, be competing with a larger number of network organisations for its customers than is currently the case. As was shown earlier, established telecommunications and Internet service providers can already be said to be competing with Sohonet, but the
29 magnitude of this competition would increase, as the difference between Sohonet and the others would become less evident for the users of the network. For some users, the distinction between Sohonet and other ISPs, such as WAM!Net, is not clear even today. In this scenario, the difference would indeed disappear.
By remaining UK-based, the changes from the current situation in terms of social, cultural and geographical issues would be relatively small. For instance, there would still be mostly the same government bodies to deal with as in its current context. However, expanding the types of users it would allow onto the network introduces some new challenges. The users would have a more diversified set of social and cultural backgrounds than what is currently the case with all the users coming from a single industry. This would add to the notion that Sohonet in this scenario probably would not be able to deliver as specialised a service as it currently attempts to do for the visual effects industry.
This is a scenario that is quite unlikely to be the way that Sohonet will develop in the future. The main reason is, as was the case with scenario 1, that the scenario does not fit well with the way that the majority of the network’s stakeholders want or expect Sohonet and its context to develop. If the scenario was to come true, Sohonet would probably loose the established goodwill it enjoys within most of its user base within the visual effects industry, because of its departure from its concentration on their industry’s needs. These users may therefore increasingly opt to leave Sohonet Ltd for competing telecommunications companies, and could as a result cause Sohonet Ltd to run into financial problems eventually leading to them having to close down its service.
The following diagram shows a stakeholder map for this scenario:
30 Stakeholder-map of Sohonet: = Stakeholder categories
Future scenario 2, = Stakeholders and their role "Sohonet as a UK-based network for any type of digital content" = Nature of relationship
Service providers / Competitors Users / Owners / Sohonet Ltd Competitors "A provider of netw ork services to anyone in the UK. The organisation has know ledge of technology matters only." Any organisation or individual in the UK. "Use the netw ork to Services Competition exchange digital content." British Telecom and other general telecommunication companies. Comp- "Sub-providers of technical etition, and services to Sohonet. There is no some significant difference betw een the social and services these companies provide cultural and those of Sohonet Ltd." issues Exchange of any type of digital content General technical services The Sohonet network system
Legislation, funding technical advice and representation
Government- and trade- organisations
The UK and EU governments. "Provide legislation and funding for Sohonet and its users".
Various trade organisations. "Provide legislation, funding and technical advice, and acts as representatives for Sohonet and its users in certain fora."
Figure 7. Future scenario 2, "Sohonet as a UK-based network for any type of digital content"
31 5.3. Scenario 3: A global network for visual effects content.
This is a scenario in which Sohonet keeps its focus on serving the visual effects industry, while increasing its size. This would imply an attempt to provide its current brand of service to a larger community of users. As in scenario 2 above, this could make Sohonet Ltd less vulnerable because of its smaller dependency on a relatively limited number of users. Some authors, such as Davis (1997), even argue that the film industry is set to expand to a point where a vast number of very small producers of film content are inter-linked via high-speed networks and the Internet. Such a scenario would give Sohonet an opportunity to increase the collective knowledgebase from which to draw upon when deciding how best to implement new functionality into the network, and as such improve the customer-orientation of the system (Cavaye, et al. 1995), (Klein 1996). Technologically, the network could be based on mostly the same type of tools as in both scenario 1 and 2 above.
However, there is the possibility that having a very large number of stakeholders involved in a system may lead to conflicting interests and that this may obstruct the evolvement of the system (Papazafeiropoulou, et al. 1999). Also, some of the current users of Sohonet have stated that the network system is already becoming too general and that it fails to provide a specialised service to the visual effects industry in London. If the network expands, there is therefore a risk that the service will become less focused on the individual needs of its users, and regular international telecommunications companies, such as British Telecom, could be tempted to increase its attempts to take over Sohonet’s business. Sohonet has, nonetheless, an advantage over the regular telecom companies in that it has experience in dealing with the visual effects industry. It is not always easy for an outside company to come in and offer its services to a specialised industry that in some ways work as a clan, where issues such as trust and who-you-know is important. This is, for example, shown in Kumar and van Dissel’s (1998) paper about “The Merchants of Prato”.
In this scenario, Sohonet would operate on a global scale. Although Sohonet in its current context also operates internationally with its link to Los Angeles, it is something very different to have to deal with users, suppliers, governments and other entities from all over the world. Issues such as geographical distances and differences in language, culture and work ethics are just some of the challenges that Sohonet would face in this scenario (Giddens 1999), (Held, et al. 1999), (Cusumano and Nobeoka 1998).
32 To sum up, this could very likely be the scenario that the future development of Sohonet may follow. One key reason is that the scenario fits well with most of the stakeholder’s expectations as to how the future context in which Sohonet is situated will develop. Additionally, Sohonet Ltd has stated that it both currently, and in the future, sees Sohonet as a network for the media industry. This scenario therefore also fits well with the supplier’s strategy for the future development of the network. The reasons lay also in issues related to the balance of power between the stakeholders involved in this scenario. Given that the entertainment industry will continue to grow and prosper, the balance of power will thereby probably shift in favour of the supplier, Sohonet Ltd, as a larger number of potential customers gives the company more choice as to who they do business with (Webster 1995). The scenario is, however, not without challenges. These are, as have been described above, mostly related to social and cultural issues.
The following diagram shows a stakeholder map for this scenario:
33 Stakeholder-map of Sohonet: = Stakeholder categories
Future scenario 3, = Stakeholders and their role "Sohonet as a global network for visual effects content" = Nature of relationship
Know- Service providers ledge Users / Owners Sohonet Ltd about ""A provider of netw ork services to the visual multi- effects industry internationally. The media Digital film facilities, Internet users, television companies from organisation has know ledge of both all over the world. Everything technology and the visual effects industry, from large production companies and can thus deliver a service that is to small garage-size shops.. specialised for this purpose." "Use the netw ork to exchange digital visual effects products, Services email, videoconferencing and Competition Competi- other industry-spesific material." tion International telecommunication companies companies. and social "Sub-providers of technical and cultural services to Sohonet Ltd, and challenges competitors on a global scale." Exchange of digital content, email, videoconferencing, and specialised know-how of the Technical services, visual effects industry. specialised for visual effects industry The Sohonet network system
Legislation, funding technical advice and representation
Government- and trade- organisations
UK Government Other international government bodies US Government
British Challenges: Film Council Geographical PACT distance, and social and cultural VES, BKSTS, differences, such as and other trade language and work organisations ethics.
Figure 8. Future scenario 3, "Sohonet as a global network for visual effects content"
34 6. Summary and conclusion
The objective of this essay has been to show that although the Sohonet network has been largely successful so far, it will face serious challenges in the future. The aim of this paper was to identify these challenges and to show how they may influence future development of Sohonet. Through an analysis of the network’s current context and stakeholders, these challenges have been identified and potential problems have been outlined. The sources of these challenges were found within the Sohonet organization itself, but also in a wider interorganisational context where they can be said to be mostly embedded in cultural and political issues. A prediction of the most likely future development of Sohonet has been selected from a set of scenarios, which each include stakeholder maps drawn in order to illustrate the relationships and roles of the stakeholders.
6.1. Conclusion The following main findings can be summarised from the analysis:
In its current context, Sohonet may stand to loose the business of some of its current users because these user organisations are not able to distinguish between Sohonet and other telecommunications companies and ISPs.
Different types of entertainment technologies are converging, and this will represent both challenges and opportunities for Sohonet Ltd in the future. The company will face increased competition from organisations from within and outside its current interorganisational context. However, the company will at the same time have the opportunity to expand its network to offer services to more user organisations.
Technological issues will probably not have an important impact on the future success or failure of the Sohonet network system. New technologies will support any of the above- mentioned scenarios that Sohonet may follow, although the need for growth in available bandwidth is an important issue in all of them. Rather than being determined by technology, the future implementation and use of the network system will be decided mostly by cultural and political issues. This is especially true if Sohonet develops into a global provider of services.
In conclusion, this analysis has shown that the nature of business within the visual effects industry in London is not as collaborative as some observers like to believe. It rather appears to
35 support the view of those who say that the British film industry as a whole is currently characterised by many small companies with each fending for themselves. By staying within the visual effects industry, but expanding into becoming a global network, Sohonet could be able to avoid the problems and volatility associated with being dependent on the business of a few small organisations, while still being able to take advantage of its know-how of the industry it serves.
6.2. Reflections One obvious constraint on the study was the limited time available. Enough time was nevertheless available to identify the core stakeholders of Sohonet, and to find relevant literature in order to build support for the paper’s main argument. Given more time, more literature could have been surveyed to add to the analysis, and more interviews could have been conducted. This could potentially have added depth and details to the topics already explored and could also have introduced new topics to focus on, such as a more detailed presentation of the various perceptions of individuals within organisations. This would also have made it easier to adhere to the principles of stakeholder identification related to the importance of considering the time-factor and to adopt a long-term perspective in order to study how perceptions change over time.
Another constraint was the lack of available literature on the use of information systems in the visual effects industry, especially related to the British segment of the trade. As a consequence, much emphasis was given to the findings from the interviews that were carried out.
A strong point of the research is that it based on the views of representatives from a relatively large cross-section of organisations in the visual effects industry and related fields. Among the organisations interviewed, and writers surveyed, there are academics and practitioners, technicians, project managers, directors, professors of information systems, and skilled observers from public, corporate, and academic organisations. This fact adds credibility to the findings in the analysis. A weakness is that the research encompasses the views of only a limited number of writers on the broad subjects of visual effects, networks, and information systems. Reviewing literature from a larger number of writers could have provided the analysis with additional characteristics and trends. This, in turn, could have strengthened the support for the main argument set forth in this essay, or it could have provided new information that would have challenged the argument.
36 All this should serve as a motivation for further research into this topic. The principles that Pouloudi and Whitley have defined for identifying stakeholders imply that the analysis in this paper should be followed by similar analysis of Sohonet in the future, in order to see how the system’s stakeholders and their perceptions change over time. It would also be interesting to see further analysis being made into the use of information systems in the British film industry in general, since little research appears to exist on this topic.
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41 Appendixes
Appendix A: List of questions used as a guide during interviews.
42 Appendix A: List of questions used as a guide during interviews.
Questionaire for use in interviews
Organisation Date of interview Interviewee
Question Answer Questions regarding the film industry in the UK: What do you see as the main current trends in the industry?
What are the main challenges and opportunities in the near future?
Describe briefly how you feel IT will, and should, be used in the industry in the future
Do you see any convergence in the use of IT within the industry? (between different trades, segments, parts of the “supply-chain”, or other).
Do you see any convergence with other industries? (music, games, Internet, or other)
What would you say is different in the way the film industry uses IT as compared to other media-industries (technologically, culturally, economically, etc.)
What is similar?
43
Questions regarding your organisation: Please describe current issues, challenges and opportunities for your organisation in the near future (2-5 years).
Briefly describe how you use IT today. (Infrastructure, size and structure of organisation, end-user use / specialists, types of technologies, etc).
How do you see IT being used in your organisation in the near future (2-5 years)?
What would you say is the main challenges in your organisation’s use of IT?
Is outsourcing an issue in your organisation?
How does your organisation use the Internet?
How would you say that your organisation’s use of IT differs from that of other organisations in the same industry/trade (technologically, culturally, economically, etc)?
How is it similar?
44