Crevan O'Grady, Partner (video)

Looking at the bit hit driven in-house productions stuff of say the US majors, the economics of these shows are enormous and they are very expensive. Creating the pilots is very expensive. When you look at this year's LA screenings and you see the drop in volume of piloted shows available, people are trying to manufacture the hit driven element out of it and they become more formulaic and I suspect that works for a while but history would suggest that the audience moves on after a certain point and that they do want something new and different and that your formula needs to change. So if you look at a formula driven product like Who Wants To Be A Millionaire, now in something like 100 countries I think, the Afghan Who Wants To Be A Millionaire was launched recently, that works for a time but it's not an infinite product, it's a generation of a pile of cash and a managed decline eventually and you harvest the difference and that isn't a business that would benefit from private equity ownership. So as an investor, we're looking more for stable businesses we can invest in and exploit for the long term and build value.

Harish Thawani, CEO Nimbus (audio)

I think it's globally acknowledged that the driver of pay television, traditionally, in most markets, has either been sports or movies or both.  Typically, sports seems to play a larger role in most countries.  Having said that, HBO was the first recognised pay channel anywhere in the world.  So, clearly, I think there's been some shift from three decades back, with the emergence of pay television, to now, where sports seem to be a bigger driver.  But, I would say it depends on different markets.  In India, sports and movies both are a key driver of pay television, and I don't see either of them losing their uniqueness.

Peter Smith, President NBC Universal (audio)

I think NBC Universal's got, I think it's probably the second largest library after Time Warner.  And if you consider that library, about less than 10%, at this point in time, has been digitally remastered and made available digitally.  You can see the scale of the opportunity ahead of us, with technology improving out there, across the global landscape, new business models emerging and, at this point in time, we've only made a small proportion of our product available, so, mouth-watering prospects ahead of us.

You do need that big, mass audience, that you get from broadcast television, to monetise big, expensive shows.  And you can't even contemplate financing something like that from an online advertising campaign.  I mean, you'll not even get close, and you're not going to get close for a number of years ahead.

Crevan (video)

I think when we look at content from a private equity perspective and when as 3i we look at where we want to have investment in content, we think about tracking stable content, content with longevity, content with some sort of predictable or explainable link with its customer base on an ongoing basis.  We’re not wanting to be in the hit driven part of the content chain and that’s partly because of the nature of private equity and the nature of the returns and the timescale we’re in.  I think what we see in the US is an ongoing ability of big networks to consistently create the blockbuster quality, compelling content, so they are approaching it by taking that hit element out and that isn’t a private equity play, so when we look at it, we’re looking for content which is multi-platform, which can be exploited in the home, can be exploited in video, can be exploited in publishing or we’re looking at some content which has such longevity and such a compelling link with the customer that it has that stability.

So if I were to pick 2 examples, on the compelling content part, live events, sports rights, probably something we would like to invest more.  If I look at the multi-platform stuff, clearly we’re already in the children’s business and we see that ability to be platform neutral as an enormous advantage in that industry.  I think stepping back and looking at the industry as a whole, I wonder how sustainable the huge blockbuster hit driven production factory model is because in the end the distribution is fragmented and they’re relying more and more for revenue from international, so there is a time arbitrage they’re benefiting from, coming from the US and eventually that industry will mature and at that point where are they going to be.  Now picking up the point about quality and the grainy, not terribly high quality stuff you get on YouTube and the like, I think we would argue, looking at that as an investor, that that is much closer to the hit driven model, so there is an enormous amount of content on YouTube but you have the same hit and miss.  You can put something and no-one will watch it, you put something on, it does really well.

How are you working those out?  The only difference is you’re not funding the cost of production but then you don’t own the rights either.  So I think the basic still apply, you can go for content with longevity, history and tradition, a link with the customer or you can try to go for the hit end of it.  We’re firmly in the former and avoiding the latter.

Waheed (audio):

I know it sounds a very odd thing to say, but I think we are relatively platform-neutral, and that includes video.  We're in the content business.  And I think you probably hear quite a lot of people who are in the media talk about content, and video's a means of distribution.  And what's interesting is that, if you go back ten years, everybody wanted to own platform.  Platform was the way in which you could be a gatekeeper to people's houses and to their cash.  What's happened is, for many years, we talked about content being king, and it wasn't quite true, content wasn't the most important thing, platforms still continued to reign.

And today, I still think, you know, platform is incredibly important, and access to platform, but what has happened is that content is increasing in value.  And if you look at – if you just look at market valuations, for example, platform-based businesses are falling in multiples, and content-based businesses are increasing in multiples.  And what we do, at Chorion, is we buy great content.  And we concentrate it primarily in children's and in crime – I can assure you, there is no connection – and what we do is buy classic content.  We look at what made it successful, we drill down and find the DNA that made the brands that we invest in successful.  So, whether that is things like Noddy or Mr Men or Agatha Christie, with Poirot and Marple.

And we find that DNA that made them successful, and we re-version it for a contemporary market.  And having created that content, our job is then to exploit it in as many ways as possible, across as many platforms.  And, of course, the visual media, is incredibly important to us, so, whether we make television or we release video or we put DVD out, it's a part of a much wider content consumption by the consumer.

There are some basic things which the characters have to have.  I mean, you can see, whether they work in publishing, you can test how they work with kids, you can look at what makes them interact with you.  So, there are a few rules that, internally, one might have, but it's 80% the character and the history of the character, but there is that 20% of your judgement, where you have to just believe that this character is capable of being transported from the written word and the visual on the page, to television, in order to create a bigger brand that will work at retail.