welcome to segment two of show 16 of hip
mojo now we’re going to talk about VCS
and why they don’t invest some content
we talked about this a little bit last
week we didn’t really get into it why do
you think these shun content all right I
know you’re gonna have a lot more to say
about this if only because I
oversimplify everything I’m a glutton
for brevity but I think why bc’s don’t
invest in content is content is an
oversaturated market place we kind of
were hinting at this when you’re talking
about newspapers there’s content
everywhere it’s really easy to produce
in disseminate it’s very challenging to
build an audience and I think from an
investor’s standpoint that makes it a
tougher call one why would you invest in
a marketplace that’s already so
competitive and two how can you actually
be certain that the specific product
that you’re investing in is going to be
enough to out-compete you know all the
Sharks are piranhas swimming out there
okay so I’m going to run through very
quickly five quick reasons why because
we get this question a lot and it’s
funny I get a lot of like entrepreneurs
emailing me saying all your content
guide you want to invest in my content
business and I’m like no it’s fine i’m
fully invested in contact you know it’s
fine i got i get out i sit on the couch
i get up i got content falling out of my
I of my pants so it’s fine one I think
it’s because VCS or backgrounds are
intact so you know the media executives
they make a little bit of money but it’s
not like they started companies and sold
for five billion then took that money
start a vc fund and invested in content
doesn’t work like that but in tech a lot
of the guys who were like at the intels
and the Oracles and you know microsoft’s
and the googles well they got a lot of
money because there was a different
organizational structure equity they
made money they are now VCS that’s their
comfort zone none of them got content to
there is a perception fair to some
extent that it’s a content as a hits
business it’s not like you’re going to
basically write a software and then you
could print a million copies of that
sell it and then you upgrade it and you
support it with content I mean even I’m
a Content guy but I’ll say it look at
Lorne Michaels he leaves SNL smell goes
in the toilet he comes back it has a
Renaissance so you could argue that you
know a tech company you could basically
take Larry Page and Sergey Brin bring
him out in the shack and put a bullet in
their head god forbid and you could
still bring in an outsider to run Google
but I’m not
sure that you know DreamWorks works if
okay I think finally a great example
maybe Facebook but not goo I would say
the opposite but that’s next week so I
totally think it’s the Opera are you
well you know we know what the segment
next week is three is this notion of
defense ability and the IP I think with
open source software and cheap hardware
and the fact that you need like five
thousand dollars to build like a
kick-ass product now I think I p sorry I
think Tech is less defensive now than
content I think you can’t duplicate the
watch module catalog in like a weekend
but you can build like a facebook
replica in like a weekend doesn’t mean
you’re going to grow it and distribute
it I get that but I just think
historically there’s this concept that
tech is more defensive and the IP is
more airtight but you look now that you
know patents are handed out for jokes
there’s lawsuits you know so I’m just
saying times have changed and we’re
going to get on that but i’m not sure
vc’s get that time has changed for is
this concept of scale it’s true without
a doubt that you could scale tech
distribution aggregation a lot easier
than you could scale content we’ve
scaled content production and to some
extent distribution despite the odds but
now that I’m six years into video
content and 12 years into content
including my previous gig I get it that
it’s just so much easier if your
distributor the problem again and
everything as a caveat the problem is in
distribution you have to be number one
or number two to quote Jack Welch in
content you just have to be good and
good is very subjective five I think
it’s this irony up if you’re a Content
exact and let’s say you work five
whatever 15 years at a media company
let’s say you made serious coin and
you’re sitting on 10 to 25 million
dollars if you now say you want to
invest as a former content or media
executive you’ve been disrupted by tech
projects so you don’t want to then go
and invest in content because you’ve
been around super premium content at a
traditional media company you’re not
going to say I’m going to go and fund
into a sort of new be content company
you’re going to say what are the tech
companies that destroyed my business
yeah I’m gonna go fund those right so
this is like the reality 5i think
reasons why they just don’t invest in
content but there is a little bit of a
sort of silver lining which is this
right now the VC industry is supposedly
if you ask even the best bc is broken
and it’s true return
suck for the amount of risk they take
return suck and a lot of it is like oh
we’ve got a pivot as VCS ourselves and
but they’re pivoting in the context of
size saying instead of raising a 500
million dollar fund and looking for you
know nine bombs that go nowhere and the
one YouTube 1.6 billion or the one skype
you know massive hit they’re realizing
that they need to invest smaller funds
like first round capital union square
ventures etc etc I’m going to throw it
out there that say that there is also
going to be a need to pivot not all of
them some of them into contents and
media funds to me a vc fund that funds
in digital media that still means to
them that we fund like ad platforms that
touch on media i do think though that
there is going to be content and two
reasons 1i think in the last year aol’s
bought five men go viral huffington post
on TechCrunch so all content or video
related yes some aggregation but it’s
still content and video those are big
exits that’s five hundred million
dollars worth of exits and the VCS of
notice and to YouTube signed initially
it was report to be a hundred million
but mark Schuster was a VC who basically
on a panel I was on set it’s 250 million
dollars that they’ve signed that’s a lot
of money so i think these have taken
notice and discussions I’ve had at
conferences and in person privately
trust me there are VCS that are setting
up these content funds as we speak they
may not have the expertise and I don’t
know how it’s going to fare but there’s
definitely there’s two things going on
that touch on to the content and video
space one is these VCS that are finally
starting to set up these funds to look
at content and the second one our
existing content companies that have
been around for five to ten years that
are going to start to do some kind of
roll up and that’s actually the theme of
my next article on TechCrunch the video
the video roll up play we’re going to
take a short break it’s just like rented
our we’re going to take a short break
and we’re going to come back with
lightning round
you
mojo now we’re going to talk about VCS
and why they don’t invest some content
we talked about this a little bit last
week we didn’t really get into it why do
you think these shun content all right I
know you’re gonna have a lot more to say
about this if only because I
oversimplify everything I’m a glutton
for brevity but I think why bc’s don’t
invest in content is content is an
oversaturated market place we kind of
were hinting at this when you’re talking
about newspapers there’s content
everywhere it’s really easy to produce
in disseminate it’s very challenging to
build an audience and I think from an
investor’s standpoint that makes it a
tougher call one why would you invest in
a marketplace that’s already so
competitive and two how can you actually
be certain that the specific product
that you’re investing in is going to be
enough to out-compete you know all the
Sharks are piranhas swimming out there
okay so I’m going to run through very
quickly five quick reasons why because
we get this question a lot and it’s
funny I get a lot of like entrepreneurs
emailing me saying all your content
guide you want to invest in my content
business and I’m like no it’s fine i’m
fully invested in contact you know it’s
fine i got i get out i sit on the couch
i get up i got content falling out of my
I of my pants so it’s fine one I think
it’s because VCS or backgrounds are
intact so you know the media executives
they make a little bit of money but it’s
not like they started companies and sold
for five billion then took that money
start a vc fund and invested in content
doesn’t work like that but in tech a lot
of the guys who were like at the intels
and the Oracles and you know microsoft’s
and the googles well they got a lot of
money because there was a different
organizational structure equity they
made money they are now VCS that’s their
comfort zone none of them got content to
there is a perception fair to some
extent that it’s a content as a hits
business it’s not like you’re going to
basically write a software and then you
could print a million copies of that
sell it and then you upgrade it and you
support it with content I mean even I’m
a Content guy but I’ll say it look at
Lorne Michaels he leaves SNL smell goes
in the toilet he comes back it has a
Renaissance so you could argue that you
know a tech company you could basically
take Larry Page and Sergey Brin bring
him out in the shack and put a bullet in
their head god forbid and you could
still bring in an outsider to run Google
but I’m not
sure that you know DreamWorks works if
okay I think finally a great example
maybe Facebook but not goo I would say
the opposite but that’s next week so I
totally think it’s the Opera are you
well you know we know what the segment
next week is three is this notion of
defense ability and the IP I think with
open source software and cheap hardware
and the fact that you need like five
thousand dollars to build like a
kick-ass product now I think I p sorry I
think Tech is less defensive now than
content I think you can’t duplicate the
watch module catalog in like a weekend
but you can build like a facebook
replica in like a weekend doesn’t mean
you’re going to grow it and distribute
it I get that but I just think
historically there’s this concept that
tech is more defensive and the IP is
more airtight but you look now that you
know patents are handed out for jokes
there’s lawsuits you know so I’m just
saying times have changed and we’re
going to get on that but i’m not sure
vc’s get that time has changed for is
this concept of scale it’s true without
a doubt that you could scale tech
distribution aggregation a lot easier
than you could scale content we’ve
scaled content production and to some
extent distribution despite the odds but
now that I’m six years into video
content and 12 years into content
including my previous gig I get it that
it’s just so much easier if your
distributor the problem again and
everything as a caveat the problem is in
distribution you have to be number one
or number two to quote Jack Welch in
content you just have to be good and
good is very subjective five I think
it’s this irony up if you’re a Content
exact and let’s say you work five
whatever 15 years at a media company
let’s say you made serious coin and
you’re sitting on 10 to 25 million
dollars if you now say you want to
invest as a former content or media
executive you’ve been disrupted by tech
projects so you don’t want to then go
and invest in content because you’ve
been around super premium content at a
traditional media company you’re not
going to say I’m going to go and fund
into a sort of new be content company
you’re going to say what are the tech
companies that destroyed my business
yeah I’m gonna go fund those right so
this is like the reality 5i think
reasons why they just don’t invest in
content but there is a little bit of a
sort of silver lining which is this
right now the VC industry is supposedly
if you ask even the best bc is broken
and it’s true return
suck for the amount of risk they take
return suck and a lot of it is like oh
we’ve got a pivot as VCS ourselves and
but they’re pivoting in the context of
size saying instead of raising a 500
million dollar fund and looking for you
know nine bombs that go nowhere and the
one YouTube 1.6 billion or the one skype
you know massive hit they’re realizing
that they need to invest smaller funds
like first round capital union square
ventures etc etc I’m going to throw it
out there that say that there is also
going to be a need to pivot not all of
them some of them into contents and
media funds to me a vc fund that funds
in digital media that still means to
them that we fund like ad platforms that
touch on media i do think though that
there is going to be content and two
reasons 1i think in the last year aol’s
bought five men go viral huffington post
on TechCrunch so all content or video
related yes some aggregation but it’s
still content and video those are big
exits that’s five hundred million
dollars worth of exits and the VCS of
notice and to YouTube signed initially
it was report to be a hundred million
but mark Schuster was a VC who basically
on a panel I was on set it’s 250 million
dollars that they’ve signed that’s a lot
of money so i think these have taken
notice and discussions I’ve had at
conferences and in person privately
trust me there are VCS that are setting
up these content funds as we speak they
may not have the expertise and I don’t
know how it’s going to fare but there’s
definitely there’s two things going on
that touch on to the content and video
space one is these VCS that are finally
starting to set up these funds to look
at content and the second one our
existing content companies that have
been around for five to ten years that
are going to start to do some kind of
roll up and that’s actually the theme of
my next article on TechCrunch the video
the video roll up play we’re going to
take a short break it’s just like rented
our we’re going to take a short break
and we’re going to come back with
lightning round
you
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