Content and Venture Capitals

Photo courtesy of Pritchett Cartoons

Outsider investors are looking in on the media business, trying to understand what is really going on there. The truth is that the content business is not so different than the venture capitals business.

Venture capitals business is based on the idea that the investors are putting there money in more than 10 companies. Hopefully one of them would become a great success, two more will be quite well and all the rest… so-so. In media - it’s not that far off. Media owners invest in about 10 different content pieces – movies, TV series, internet series and more. Hopefully one will become a major hit, two will do quite well and all the rest so-so.

In our area, the creators of the content don’t really need the facilities of the large production houses (like record labels, major studios, TV networks) in order to produce a hit. There is only need for money. Venture capitals might find themselves in the near future investing in content – the multiples are not so different than in hi-tech. The investments needed are in the same scope and the real advantage is that you know very quickly if you have a hit or not.

K.