Digital media comes to town


27 May 2004

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Any project that swallows €130m of public money when government finances are being squeezed on all sides can expect a lot of scrutiny and the Digital Hub — Ireland’s digital media quarter in the Liberties — has certainly had plenty of that.

Apart from funding itself, the issue that has courted most controversy is whether digital media is a strong enough concept to build a whole industry on.

Despite its detractors, the Digital Hub has reached the end of the first phase of its development more on less on schedule. Two acres of the nine-acre site have been developed and three buildings — all within a stone’s throw from each other on Thomas Street in the Liberties — have been fully commissioned: the Digital Hub head office, the One Five Seven building and the Digital Depot.

If property letting were what the hub was intended to be about, then it would be seen as a roaring success. With a large amount of office space lying empty around the capital, the Digital Hub can boast almost full occupancy. This is all the more impressive considering that the newest of the three facilities, the Digital Depot, only opened its doors last October.

Of course the grand plan is about a lot more than simply letting office space. The stated aim is to create a nucleus of like-minded digital media companies that together will form a sector with the necessary critical mass to compete on a world stage.

According to Stephen Brennan, director of strategy and marketing in the Digital Hub Development Agency, the hub has been loosely modelled on Silicon Valley and other successful clustering models. He thinks that what all successful clusters have in common is that they create linkages between businesses, the education sector and the community. “In my opinion, we will succeed where other digital hubs have failed because we have the concept of the consumption of the product or service as well as the creation of the product or service within one community. That will be critical,” he says.

That the Digital Hub has developed this way is no coincidence: the legislation that established the Hub back in 2001 included a specific education and community remit as a pre-condition of Government support for the project.

In mitigation, the hub cannot in its present form be described as the finished article and perhaps it is unfair to judge it as such. This is a report on the progress that the hub has made to date.

While it is still unclear which activities will ultimately be the growth engine for the digital media sector, the early running has been made by the gaming sector, where Brennan thinks he can detect “the beginnings of a critical mass”. At its epicentre is Havok, perhaps the best-known Irish name in the games software industry, which relocated to the Digital Depot late last year, and US gaming technology firm TKO Software, a brand new scalp. Brennan says that there are also several other gaming companies about to join the Digital Hub that will add to the critical mass.

To be described as a true cluster, the hub will not only have to get the right number of companies but it will also need to get the right type. Paul Cummins has clear views on what is needed to turn a group of like-minded companies in the same industry into a proper cluster. A former tax consultant with PricewaterhouseCoopers, Cummins was there at the early stage of the Irish Financial Services Centre (IFSC). He chaired the IFSC funds legislative sub-committee and worked in collaboration with the Department of the Taoiseach to help develop the IFSC internationally. “There is a need for cross-disciplinary sharing. A lot of digital media people are not very commercially minded. I think there’s a richness being lost by not having a mix of people from different backgrounds,” he suggests. “You need a broad range from different disciplines.”

Ironically, last year Cummins’ company Metaphor Business Graphics was turned down for residency in the hub despite seeming to meet all of the necessary criteria for it. “I’m supportive of the Digital Hub as a principle but I’m a bit surprised at being turned down,” he says. His business background, he feels, would have added to the mix of types currently occupying the hub.

Meanwhile the message from the hub management is clear: the facility is slowly finding its feet and beginning to show clear signs of progress in terms of developing into a cluster. But what do the tenants themselves think? Are they starting to feel the benefits of the cluster effect?

Siliconrepublic.com spoke to a wide cross-section of companies based there and there is a perceptible enthusiasm and goodwill for the digital media market in general and the hub in particular. Those with valid criticisms to make nonetheless seem to understand the vision and respect the aims.

Ruth McPartlin, managing director of web consultancy Fluid Rock, a hub tenant, has generally favourable views about the facility and feels it is important to “stay positive” about it in this early stage of its life. In terms of improvements, more could be done to raise its profile, she feels. “At the moment, I find the public awareness of what goes on here not very high. I hope that people will become more in tune to what’s going on here and that it will become more internationally recognised.”

The people that seem most positive about the hub generally belong to smaller firms that occupy the Digital Depot building. Gary O’Neill of Zinc Films, a two-person outfit that specialises in 3D animation, likes the way the facility is run, particularly the flexible approach of management.

The notion of a cluster – central to the Digital Hub vision – was cited by many we spoke to as an important reason for choosing the hub as a location over another business park or serviced office. Cummins believes that to be successful, the Digital Hub project must allow companies to collaborate and share ideas. “Networks are the key to doing business: talking to people, meeting people, exchanging ideas. Ideas beget ideas.”

So are these networks beginning to evolve? O’Neill believes there are genuine networking opportunities both through formal events organised by the management company and through casual inter-company contacts. “We don’t have expertise in audio but there are guys in here who know about it, so we can talk to them. It’s good like that.”

Paul McGrath managing director of Kavaleer Productions (pictured illustration by Kavaleer Productions), an animation and film production company that moved into the Digital Depot in January, likes the ready-made network aspect although he concedes that he has not done any real business with other hub companies yet. “Nobody wants to give anything away; everyone keeps their cards close to their chest.”

Speaking of his own company’s experiences, Neil Leyden of Journeyman Productions, a digital media content creator, explains: “We thought it would be great for us to partner with people here, for example by being in a cluster with a mobile technology company we could do a tie-in with a game show where there’s phone voting. That’s what we moved to the hub for.”

Not everyone feels that the networking structures so far have been sufficient. As Michael Brophy of Certification Europe points out: “The clustering has taken an awful lot longer to be realised than we expected.” Eight months into his tenancy David Malone, CEO of Twelve Horses, has yet to detect any sign of the networking among companies that the hub was supposed to lead to. “There are no networking opportunities,” he says bluntly. “It’s a misnomer. All the businesses here are fundamentally different.” The messaging software firm is one of the larger tenants in the hub, with 25 employees.

Neil Leyden agrees that the early days promised more than they delivered: “In the beginning it did feel like a load of companies sitting around beside each other and not seeing that there was a synergy between them.” However he claims that the lack of networking to date has its roots in day-to-day routine rather than disdain for clustering as a concept. “I don’t think there’s a reluctance to network, it’s that people haven’t had time to sit down and think about it because they’re concentrating on their own business.”

Brophy calls for more participation from the development agency behind the hub. He feels that the resident companies shouldn’t be expected to take all the initiative by themselves. “Simply putting companies in the same room doesn’t make sure that synergy necessarily happens.” He says that the role of the development agency should be complementary to any schemes set up by resident companies, driving and championing the best of these.

At the same time we are starting to see concrete examples of companies taking their own initiative and meeting a perceived need. The Digital Media Forum (DMF) is a new co-operative grouping of 22 companies within the hub. It has already announced a training and development programme, funded by Skillnets, for owner-managers of firms located in or around the hub. According to Leyden, who is also CEO of the DMF: “The idea is to train existing companies in business skills they lack.” He admits that a second, ‘Trojan horse’ agenda is to get these companies talking to one another and networking more actively. Citing his own company as an example, he suggests that many of the companies in the hub have complementary skills to bring to a project. “We create media products such as documentaries, animation and TV; when we want to go cross-platform with them, we can’t do that ourselves, so we can turn to mobile developers or games developers here.”

One missing ingredient Brophy highlights would be a hub intranet, to act like an internal bulletin board, as an additional networking vehicle. He sees opportunities for his company, a specialist in quality software development, to sell its services to other hub occupants, but there is as yet no facility to find out where any openings exist. “There are services we offer that may interest other residents and vice versa, or we could point our clients to some services that they offer,” he says.

There are other drawbacks. Eamonn Fallon, CEO of Daft.ie, the property listings website, points out that the open plan nature of the offices in the Digital Depot doesn’t suit all companies. “I prefer the place we have now [at 157 Thomas Street] because it’s less private in the depot, you can hear phone calls. If you’ve two companies that can do the same type of business, I don’t think that can work. We’d be on the phone a lot as part of what we do,” he explains.

In Malone’s opinion, the huge government investment was not going towards the development of a digital media industry but something altogether more banal. “To me it’s a property play,” he says. “There are no financial incentives for companies to be located here and I don’t see that changing.”

The hub is also perhaps still suffering from a bout of buzzword-itis. How else to explain why a website must rebrand itself as a ‘content platform’ to qualify for entry into the hub as a digital media company? Semantics aside, others are quick to make analogies with either physical developments such as the IFSC or entire sectors such as the software industry, both of which had their teething problems in the Eighties before gaining the established positions they now hold. With the digital media sector, it’s not hard to see parallels of those early days.

Ireland’s digital media sector is clearly in its infancy and as some occupants note, the hub is still experiencing occasional growing pains. Brennan readily admits that he and his colleagues at the Digital Hub are still searching for the glue that will bind it all together. “We’re trying to take pragmatic steps towards defining in an Irish context what works; what we can create a momentum in,” he remarks.

“Having seen how it can work [with the software industry], this project gives us the opportunity to try and replicate that again multiple times. There are more than 25 companies in the cluster now, any one of which could really produce that product or service that will very quickly lead the market and drive certain verticals in certain directions,” he says.

The feeling is that the sector could be on the cusp of great things. The potential is certainly there. Many have deliberately taken up occupancy in the hub with an eye on the future. Many of the advantages are to be had in the medium and long term. Fallon adds: “It’s not just going to be a bunch of dotcommers working among people who would resent it. Long term, I think it’s going to rejuvenate the area, the goals are pretty commendable and I’m glad to be part of it.”

By Brian Skelly and Gordon Smith