Tuesday, April 23, 2013

Content Is King And A Good Investment

For makers of content, the demand has never been higher.  Consumers crave content to feed their entertainment hunger, on TV, on tablets, smartphones and laptops.  Where only a few decades ago, video content was limited to broadcast and a few cable networks, today the list has expanded to include premium nets like HBO, SHO, and Starz, video on demand services, and especially the rise of streaming services from You Tube, Amazon, Netflix, Redbox, and so many more, both subscription and free to view.  

And what appears to be the secret sauce in building a successful network or online service, original content that breaks through to become valued.  Broadcasts have felt that with American Idol and other hits, premium services like HBO felt it with Sopranos, and Netflix is feeling it with House of Cards and Arrested Development.  In fact, Netflix recent earnings are subscriber growth are results of this push toward original content.   Consumers are craving more and that desire never seems to get fulfilled.  For as one series fulfills, another takes over to attract demand. Not that every piece of original content achieves such status, but it seems that accessibility of content helps to drive viewership.

Wall Street might agree.  "Corporate and private equity firms will be looking to bulk up on entertainment, driven in part by tech companies’ need for content that provides 'a level of security on prospective cash flows,' the analysis says."  Comcast paid well for NBC; Disney paid well for Lucasfilms and their Star Wars franchise.  And Netflix has seen its stock price soar as a result of its push toward more original and exclusive content.  Today Sony has announced plans to create another  network to play its library of movie content.  You Tube has its original channel and Amazon is streaming original pilots to help find their next series to produce.  And consumers can't seem to get enough.  Of course, with so much new content being produced, the challenge to find the best gets more difficult.  Breaking through the clutter to be discoverable will take on a rising challenge for all these companies in the content creation and distribution space. 

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