Louisiana Internet Software & Technology Association Blog : Louisiana Internet Software & Technology Association : LISTA Blog : LA Technology Law News & Updates

An Op-Ed Submission by Erich Rapp, charter member of the Louisiana Internet Software and Technology Association (LISTA)

From Shreveport and Baton Rouge to Lake Charles and New Orleans, hundreds of technology-based businesses and thousands of savvy professionals and new college graduates are immersed in the state’s growing Internet software and new media industries.

What the rest of the United States is beginning to discover is that they too can benefit from the experience and innovation of these professionals for 35 percent less than their counterparts in other regions of the country. That’s 35 percent added to the bottom line, 35 percent to their market capitalization.

In 2009, at the urging of the Louisiana Internet Software and Technology Association and other advocates for the growth of the state’s technology-based industries, the Louisiana Legislature established tax credits equal to 35 percent of all labor costs paid to Louisiana residents and 25 percent of all production costs spent in the state for digital media initiatives and other software development projects.

These aggressive tax credits placed Louisiana among the top states acting to attract technology-based businesses. As important, these credits are in place now and can benefit companies already working here in both established and emerging industries.

In Shreveport and New Orleans, companies developing computer programs and digital graphics for biotechnology research projects can now do it for 35 percent less in Louisiana. 3D animation studios and video game developers can reduce their overall costs by half by hiring some of the 14,000 professionals working in digital interactive media industries between Baton Rouge, Lafayette and New Orleans. Manufacturing plants along the I-10/I-12 corridor can create plant optimization software and save tens of thousands of dollars. Engineering, communication and aviation companies working in Alexandria, Monroe and Ruston can develop new technologies and programs, while investing in homegrown talent.

For the thousands of Louisiana-based workers and the thousands of college graduates that want to live and work in the state they love, the Digital Media Tax Incentive Program creates their best opportunity to date to establish roots in Louisiana, with an average annual salary of more than $50,000. Importantly, they can put their skills to work and pursue their entrepreneurial dreams.

The Louisiana Department of Economic Development will begin 2010 by reviewing the success of the Digital Interactive Media Tax Credit Program. To date, companies and individuals have submitted dozens of applications. Most importantly, Louisiana’s technology innovators are being put to work in all types of industries that are just now learning about the resources available to them.

We are just powering up.  

Louisiana’s Digital Interactive Media Tax Credit program is working. Louisiana-based technology companies are seeing more business because of it.

Business is coming to Louisiana and more of our people are being put to work in highly skilled, technology-based jobs. Now is the time to push ahead and continue this important program.

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I realize that I may be overly focused in this blog on e-publishing, but I think this technology is ground breaking in a number of ways. An e-book reader encompass a number of important trends in technology hardware and software.

The equipment, an e-reader, is highly specialized in contrast to a notebook computer which may perform many different functions. As various aspects of hardware such as memory chips, storage, display technology, etc... decline in cost and shrink in size, the economics of highly specialized hardware improves. Any e-book reader is an expression of that fact. The continuing evolution of highly specialized hardware and software is very important. It reduces the complexity of using the technology and broadens the potential user base.

An e-book reader generally also uses mobile phone technology instead of Wi-Fi or broadband internet access to the web. Mobile phone technology access to the web is an extraordinarily important aspect of web connection. As a result, the user of e-book reader technology can access and purchase e-books from nearly any location. This approach to product delivery is extraordinarily important to any one trying to a make an electronic consumer sale of published materials.

The main players in this arena are Amazon and Sony. Amazon's Kindle 2, the market leading e-book reader, is competing with Sony's new e-book reader which has just been announced as an open format e-book reader using the e-Pub format. The new Sony reader is called the "Daily Edition." The USA Today had a great article in its Tuesday August 26, 2009 internet edition as part of the technology section. This article described what Sony is trying to do with its new e-reader. The article is entitled, Sony's Reader Daily Edition takes on Amazon's Kindle. In a very exciting aspect of Sony's announcement, the new Daily Edition will be able to download content in the e-Pub format from many libraries around the country for free. The Sony e-book reader is using AT&T's 3G network while Amazon is using Sprint's mobile phone network.  

The e-book reader regardless of who creates it is a college student backpack size reducer and a business person brief case size reducer. Such e-book readers are having an evolutionary impact on the future of print media. Now that the technology is mobile and is contained in a compact and easy to us device, the growth of e-publishing is going to be explosive and game changing.

Erich P. Rapp.

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As Louisiana becomes a hub in the next few years for the development of software, mobile applications and web platforms, I am wondering what value can Louisiana digital interactive media developers bring to the industry. One area that desperately needs to be addressed is the news media and journalism.

It is no secret to anyone that is conscious that the industry that delivers news to the public is struggling to find a profitable business model in the digital media age. Where is this industry heading and can developers in Louisiana add value to the evolution.

Perhaps, the Politico.com web site and the story behind it present a glimpse of the business techniques that will govern the future of journalism and news delivery.

The first and foremost Politico.com business concept that stands out to me is volume of content and extreme detail about a relatively narrow (at least for a newspaper) subject. It's hard to imagine any traditional media source providing as much detailed and essentially real time data about politics in Washington DC. While the Federal Register provides a great deal of detail about federal action, its not anything close to "real time" and it is completely devoid of the human component. Politico is the federal register of politics using a Twitter model without the 140 character limit and a huge mix of gossipy human stuff. No one but a reporter at Politico could possibly want to know this much about politics in Washington DC. 

And yet, I am told that Politico is profitable and widely read. That is more than the New York Times can say at least as to the profitable part. All of this suggests that no matter how much detail one provides about politics in Washington DC, there is at least some audience for it. It also suggests that if you can place an enormous amount of entertaining (at least to someone) political information in a digital setting at a low enough cost , the business can pay for itself with advertising. The delivery of news has a "long tail" component. 

The August 2009 issue of Vanity Fair magazine contains an article entitled, Politico's Washington Coup which describes the Politico story in some detail. If you want a sense of the future of journalism, this article is a good read.

This may hold some promise for local newspapers. The key to the future for local newspapers may be more information. Adding more stories in a digital format does not cost as much as adding more pages for more stories in a printed newspaper. The specialty for the local paper is local news. Local news is as to your local newspaper as Washington politics is as to Politico. It seems like the local newspapers need to go more local with everything, e.g., more local business news, more local society and social event news, and more local entertainment news. Change the emphasis from the AP news feed to everything local with the names of as many local people printed in the newspaper as possible.

Digital interactive media developers in Louisiana need to partner with traditional media organizations to build a better news delivery device using Louisiana's digital media tax credits incentive program.

Erich P Rapp.

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The Louisiana House of Representatives has scheduled Senate Bill 277 for a vote in the House of Representatives on Monday June 22, 2009. Senate Bill 277 is, of course, the renewal and extension of the digital interactive media business/tax incentive program. Between now and then, please call your Representatives and voice  your support for SB 277.

Senate Bill 277 is authored by Senator Ann Duplessis of New Orleans and now being managed in the House of Representatives by Representative Cameron Henry. The bill is supported by the Louisiana Internet Software & Technology Association (LISTA), Greater New Orleans, Inc. (GNO, Inc which is the business development arm of metropolitan New Orleans), BRAC (Baton Rouge Area Chamber of Commerce), and the Jindal administration. The bill will provide marketable/transferable tax credits and cash rebates to businesses spending funds in Louisiana to create a broad array of software and web platform design and development projects.

By encouraging the operation of these types of  businesses, Louisiana will likely draw many new high paying jobs into the state on a long term basis. LISTA is very optimistic that this legislation will have a transformative impact on the Louisiana economy if adopted.

Between now and Monday June 22, 2009, please call your Representatives and voice your support for SB 277 and then Louisiana can join the digital media revolution.

Erich P. Rapp.

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Digital Interactive Media including Twitter and YouTube are fueling and energizing a popular uprising in Iran. While traditional media operations face official steps attempting to thwart their reporting in Iran, the enormous number of informal social media "journalists" are shooting video of protests from their cell phones that is then posted on YouTube and Twitter and posting reports about protests in real time on Twitter. These activities seem to be energizing the uprising in Iran. Wow!!! Digital Interactive Media in the form of social media networks has come of age. 

Critics keep suggesting that Twitter may never make any money, but imagine how one would feel if their web platform was supporting a popular uprising against an illegitimate government that is part of a repressive regime. Money may not be everything. Congratulations to the owners of Twitter. Their web platform may facilitate the reform of the Iranian government that many years of United States government pressure has failed to do.

Some of the related stories can be found at Iran's Twitter Revolution on the Nation web site and also on the New York Times web site in the article entitled, In Iran, Iron Cleric, Now Blinking. These events in Iran are a huge step forward for the role and relevance of digital interactive media in the form of social media networks. It is a revolution - - - In this case, literally.

Erich P Rapp.

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Dell Computer reports it has earned $3 million in sales from people visiting their web site referred from their Twitter profile with 624,000 followers. Dell has paid Twitter $0.00 for its profile and promotion. This report is found in a New York Times story dated Friday June 12, 2009 entitled, Dell says it has earned $3 million from twitter. Amazing. Is there any doubt why old media outlets like newspapers, magazines, radio and television are suffering steep declines in their advertising revenue.

While Twitter cannot continue to give away commercial advertising for free, Twitter's costs for delivering that promotion are much lower than any traditional old media outlet. The old media outlets most evolve into a new model that focuses more on web based delivery and combines professional journalism and user/amateur provided journalism in order to reduce their cost base. The details of such a model are yet to be determined, but the path to uncovering that business model might become more clear in the months ahead.

Erich P Rapp.

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The Louisiana Governor's office declared its support today for Senate Bill 277 concerning digital interactive media business incentives in Louisiana. After several weeks of negotiations and discussions with the leadership at the Louisiana Department of Economic Development about the exact language to be contained in Senate Bill 277, Senator Duplessis, LISTA, the Department of Economic Development and the Governor's office have reached an agreement on the terms of Senate Bill 277.

The Ways and Means Committee of the Louisiana House of Representatives will hold a hearing on Senate Bill 277 on Monday June 15, 2009 at 9 AM. If you are involved in this business and interested in supporting Senate Bill 277, please come to the committee hearing to show the committee members the business community support for the bill. If we as a digital interactive media industry in Louisiana fail to show our interest, we may find the committee members find it hard to care about our bill. Let's show our support.

The most exciting part of the bill is the definition of "digital interactive media." Under the new program, the digital interactive media incentives would be available for the development of many different types of software and web platform development as well as the development of video games and interactive animation. Under the existing law, the incentives have largely been limited to video game development. We are very excited about the potential for new businesses in the broader community of digital interactive media moving into Louisiana. In the years ahead, we anticipate new developer/programmer and new design jobs coming to Louisiana in material numbers.

The next most exciting thing about Senate Bill 277 is the proposed incentive parity with the film and television production incentives program. Under the existing digital interactive media program, the benefit was 20% transferable tax credits on in-state expenditures and the percentage declined over time. The new program would allow 25% transferable tax credits on all in-state expenditures and a 10% bonus for expenditures on labor residing in Louisiana for 35% transferable tax credits on expenditures on labor residing in Louisiana without any declining  benefit over time. As a practical matter, this combination of benefits effectively reduces the cost of developing many types of software and web platforms in Louisiana by over 30%.

It will take time to educate the digital interactive media industry about the benefits of this new program, but the program will eventually be a significant draw for new software and web platform development business in Louisiana.

Once this legislation becomes law, we must begin thinking about qualified workforce development by education and by transfer of qualified labor into Louisiana and we must work to change the perceptions about the workforce potential in Louisiana. Louisiana, however, can overcome these problems and build a digital interactive future.

I offer a prediction. With the proposed digital interactive media program enacted, Louisiana will be transformed from a digital interactive media backwater to a top five state player within ten years. Louisiana will be a leader in software and web platform development.

Erich P Rapp.

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On Friday April 10, 2009 and Saturday April 11, 2009, the Hotel LeCirque in New Orleans, Louisiana was the host to WordCamp NOLA 2009. The speakers presented to a sold out crowd of Internet platform and social media enthusiasts.

The event included presentations and panels on social media advertising strategies, the impact of social media on traditional news media, using Wordpress tools for blogging, and even advice from a millennial blogger on connecting with a younger audience.

The audience seemed interested and attentive, and the volume of tweets to #wordcampNOLA was enormous. Hopefully, the WordCamp NOLA event will be repeated next year. More information can be found at the WordCamp NOLA website.  

Erich P. Rapp.

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