12 Mar 2015

One might think that media companies would make exceptional venture investors, given that they take a venturing approach in their core business. Each year they deploy a predefined budget (the fund) on a slate of highly speculative movies and/or TV shows (the investments). The outcome is a collection (the portfolio) that contains many duds, a number of break-evens, and hopefully a couple of blockbuster hits. Both media companies and venture capitalists bet on people - venture capitalists invest in entrepreneurs while media companies invest in actors and directors.

Unfortunately, very few media companies look at venture investments the same way they look at creating content. Studio executives have told us that it’s easier for them to get approval for a $100m movie than to get approval to participate in a $10m A-round. In an industry facing an inevitable slow decline in its traditional revenue base, new business models are required in order to bring about the necessary level of growth and change.

Most media companies by now have created “digital teams” or appointed Chief Digital Officers. While digital is critical to the media business, it should be a Business as Usual activity that is part of the core business. The present - and future - of media is business model innovation...

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