Five Eyes

Investment

Achieving scale and long term growth requires good ideas, strong management and smart investment. Financial incentives have been used to good effect elsewhere, most notably in Canada through very competitive tax breaks for games development. Work by the UK trade body for games development, TIGA, estimated that extending the tax benefits currently available for film production in the UK to games development could create 1,400 new jobs in the sector and increase investment by games studios by £146m. Given that Scotland punches above its weight in games, measures such as this could disproportionately benefit studios in Scotland.


It is recommended that the Scottish Government gives urgent consideration to a workable package of fiscal benefits that can give the games industry in Scotland greater competitiveness. Whilst ministers have made it clear that they do not intend to use their power to vary income tax during the lifetime of the current Parliament that would not preclude a pilot programme of work to be launched in 2010 which could identify an achievable package of actions that might include tax variation and non-domestic rates relief....click here to read more and download the strategy document.

 

Scotland also needs to develop a sophisticated investment culture in the digital media sector...click here to read more and download the strategy document.

Investment Readiness

Even with a suitable supply and variety of investment options, businesses must be investment ready. Click here to read more and download the strategy document.

Entrepreneurship

Scotland’s digital media sector must encourage entrepreneurship and have the capacity and ambition to rise to the investment challenge.Click here to read more and download the strategy document.

Content versus Platform

Increasingly, the act of creating content often involves the development of enabling platforms to support distribution across new channels. Convergence is blurring these lines, and a range of investment options is needed to support new and emerging business models. Click here to read more and download the strategy document.

Knowledgeable Investors

Linked to the different types of investment is an awareness and understanding from the investment community of the potential returns from the digital media industry. Scotland has to cultivate a more informed investor base...click here to read more.

Mergers and Acquisitions

Scotland needs to become more acquisitive in digital media and needs to build the investment support vehicles...click here to learn more and download the strategy document.

Visibility to investors

In order to attract investment for digital media companies there must be seen to be a critical mass of investable propositions flowing from the Scottish industry. As such, investors will be attracted to multiple opportunities and Scotland will be seen as a vibrant growth area. Similarly, the public sector needs to realign itself to understand the speed and dexterity of the digital media sector and encourage appropriately responsive investment provision. Click here to read more and download the strategy document.

New Finance

Mainstream business finance is an important catalyst in all dynamic sectors of the Scottish economy. But having access to equity from venture investors is not always the best mechanism for growing small and volatile businesses in new markets. Scotland is growing and developing a range of new investment opportunities for the digital media sector to complement its strong angel investor syndicates.

The Digital Media IP Fund, a partnership between Scottish Enterprise and the Creative Scotland Innovation Fund, will stimulate the development and production of innovative, non-broadcast interactive content that encourages co-investment from the private sector and is capable of generating revenue for Scottish based companies. Significantly, the fund does not take an ‘equity’ stake allowing companies to retain the greatest share of their IP rights, whilst testing companies to submit a robust business plan. The fund will provide £3m, which combined with a further £3m from partner investors, will provide a total package worth at least £6m over three years for the sector. This makes it the biggest non-equity based innovative digital media fund in the UK.


Channel 4 has launched “4IP”, an innovation fund which has made several investments in Scottish projects and has committed further new money to digital media in 2010, in line with its changing public remit. So far, the broadcaster has committed up to £20 million on a pilot basis across the UK. Par Equity, which coordinates an angel investment syndicate based in Edinburgh, launched a new venture capital fund, Par Innovation Fund and has made several early investments in digital media. Finally, digital media companies, such as Realtime Worlds, NX Vision, HubDub and Kowalski TV, have secured investment through the Co-Investment Funds managed by Scottish Enterprise in partnership with private sector fund managers. These funds recently welcomed Channel 4, STV and Par Equity
as investment partners.