In the world of new media, the city of Toronto seems to be suffering from a lack of teamwork. According to a recent report by PricewaterhouseCoopers, Toronto’s new media organizations are potentially losing more than $1 billion in annual revenue, in part because they do not speak as one.

The report states that, though the new media industry is in its infancy, Toronto’s cluster has not promoted itself as successfully as counterparts in New York, San Francisco and, to some extent, Vancouver. As a result it is losing tremendous amounts of potential income.

“The Toronto New Media cluster needs to speak with a single voice…in order to raise awareness of its capabilities and what its potential is; especially it needs to capitalize on both local and global markets and it won’t be able to do that unless it has a marketing platform,” said Rick Clayton, principal consultant at PricewaterhouseCoopers and project manager for the report.

“The industry has to speak with a unified voice that it can get into the corporate boardrooms of Canada,” he added.

“I think we were surprised [with] the gap…we came to the conclusion that our value of the commercial output of the cluster was approximately $900 million and, based on a population of 4.5 million and a leading position in Canadian business, we think it should be at least twice that,” Clayton said of the report’s conclusions. New media is defined as content, services and products delivered digitally.

According to Mark Deacon, president of SMART Toronto, a business association for the high technology and new media industries, the city has all the attributes necessary to be extremely successful but it has been stymied by an abundance of smaller companies which don’t collaborate as much as they should. In essence, there is no community. He said this is, in part, because the industry is young and maturing and that a manifestation of a young industry is a lack of coordination. The city’s geography also doesn’t help. “It is very, very disparate and because of the geographic extremes of Toronto there have been very few new [media] clusters,” Deacon said.

“Our IT&T (information technology and telecommunications) sector in Toronto is by far the largest in Canada, yet Ottawa’s has more visibility,” he said. This is because Toronto’s is lost in a sea of other very powerful economic sectors, Deacon added. “[So] by its very nature it doesn’t get some of the attention that it needs, locally or outside of Toronto.”

The making of the report

“The study was done because a number of people in the greater Toronto area came to the conclusion, independently, that the cluster was not as visible or as extensive as perhaps it should be given the position of Toronto as such a leading Canadian technology and business centre,” Clayton said.

SMART Toronto, The City of Toronto, Interactive Multimedia Arts and Technologies Association, Centennial College, the Ministry of Energy, Science and Technology and Human Resources Development Canada all partnered in the funding of the report.

The repercussions are serious, according to the study. This digital gap equates to a minimum loos of 30,000 direct and indirect jobs. The report’s conclusion is “if the Toronto New Media cluster cannot grow in a sustainable manner, it is unlikely that Canada can participate fully in e-business and other digital activity to its own advantage.”

But not everyone sees the sky falling.

“I think the future is very good and I am also sceptical of a lot of these reports,” said Bill Bishop, chairman of Bishop Information Group, an e-marketing strategy organization, and author of Strategic Enterprise: Growing a Business for the 21st Century.

“You can make reports come out any way you want; if they want to make it negative, they can make it negative,” he added.

Bishop looks at it from a more global perspective. “If you compare ourselves to New York and San Francisco, we are not going to look so good. But if you compare Canada to the rest of the world…we would be definitely be second.”

He added that result hardly surprises him since the United States is ahead of everyone in the adaptation of e-commerce. Bishop does agree, however, with the report’s conclusion that a common voice is needed.

Sky falling or not, the report did put unifying the industry’s voice at the top of the to-do list. The creation of Liberty Village on Mowat Avenue in the King and Dufferin area of the city will be part of the solution. The Liberty Village New Media Centre will service all of Toronto’s new media industry. The Centre is a formal partnership between SMART Toronto, the City of Toronto and York Heritage, according to Deacon. Its main goal is to help elevate the profile of new media in the city. It will open in September.

Build it and they will come

The first phase of Liberty Village is to create a community, in part by having a physical presence where people can learn, drop in and exchange information, Deacon said. “There is no repository for information on new media in this city and that is what Liberty Village will be.”

Later there will also be a marketing campaign to help brand the local new media industry.

Even with the creation of a village, there will still be hurdles to overcome. “We think that the biggest single issue is that many perspective customers in the Toronto area are not yet alerted to the potential and significance of e-business and e-commerce,” Clayton said. Another issue is the reticence of financial institutions to back contract-based revenue models.