Crevan O'Grady, Partner (video)
In proving the concept that you're better investing in content than in distribution, clearly in our business the proof of the pudding is in the eating, so we're trying to buy a share for a Euro, a Pound, a Dollar and sell it for 2, so we will see whether we have that judgement right. The things we see that tell us we're probably heading in the right direction there I think are all around you know consumer behaviours, we are seeing people gravitating towards you know preferred content, we are seeing continued strong audience for the right stuff. We are seeing for some of the stuff in our own portfolio, we are seeing price increase people being able to push through, or at least hold prices in an environment of declining ad revenue because a lot of these businesses aren't funded. But we're also seeing the ability to push content across platforms and across projects, so you don't just have to rely on video, you can make money from publishing and from apparel and from toys and from a whole plethora of sources. You may be using videos for primary promotion of that but you are making money in other places, you are taking slivers of margin from other parts of the value chain and you're never going to be able to do that with distribution, it's tough to have an ITV or an RTL T-shirt but you can have a Noddy or a Mr Man, so again that I think demonstrates that you can make this work.
Jonathan Pfitzner, Co-founder and director Argent (audio)
I certainly believe there's increasing power to the format owners. Traditionally, the broadcasters have had a lot of power because they've had to be scale businesses because it has cost a lot to buy spectrum or to lay cable or to put dishes up on people's houses. And as the cost of distribution collapses, then the numbers of people that can deliver content increases. So, if you've got extremely good content, then I think that puts you in an increasingly strong position. As an example, when I look at the last kind of five years at who's really, really made money in TV, is it ITV? Or is it people like 19 Entertainment? Is Simon Fuller sitting quite pretty off the back of having some quite interesting formats and really monetising them? Yeah, absolutely.
Waheed Alli, Chairman Chorion (audio)
I think it is by the valuation multiples being put on content companies versus companies that have platforms. And, you can see that if you are a platform owner and you don't own content, your valuations are falling. They may have been on a 15 times multiple and they're now heading towards an 8 or 9 times multiple. Content-based companies are moving up and up and up, and we are seeing 15, 16 times, in terms of valuation. And that's the market saying we understand now, that if you've got content of value, and if your brands interact with the public, they will pay more for your brand. They will buy things in addition to books, they will buy licensing, they will buy merchandise, they will buy the T-shirt, they'll buy the book, they'll buy the mug, they'll buy the play set. And they'll want to do it because they want to belong and have a greater interaction with the brand and the character.
Peter Smith, President NBC Universal (audio)
The fastest emerging bit of revenue we've got, that's significant, is download, and streaming through players like iTunes, and that sort of digital download business, either streaming or download to own, is quickly becoming a significant piece of business. That's the most exciting thing we can see for the short-term i.e. the next three years.
From Hulu, it's ad supported, on iTunes, you download it, there's no ads, and you can either download it for rent, to film, you can download it to rent on or around the DVD release date, so, that's often six months ahead of when it's available on pay TV or on a website.
We're in the early stages of deals with people like iTunes in the UK, France, Germany are next, and we've just put an Australian deal together – so, we're only up in two territories out of 200, so far, and looking at the next three at the moment, which are France, Germany and Japan.
Peter (audio)
A very good point you raise, that these guys are getting access to content and therefore probably think – and will continue to think, that there's no need – or it's not essential, that we make a big investment in that space. I think you need a chip at the table, to be perfectly honest. I've watched Sony, I think they played it quite well, every time Sony need support and need product support, for example, in the Blu-ray HD battle, they used the Sony Studio very effectively, to back the Blu-ray versus HD from Toshiba battle. They got the Sony range out there quicker, they kind of ensured that Sony lobbied the industry with some enthusiasm and got Disney and Fox behind it.
Crevan (video)
I think when you look at the relationship between technology business, traditional media businesses and content businesses, it's quite a complex relationship. The technology businesses are growing in that value chain because it's becoming a more complex technology. In the good old days that was you know … she did the signal management, the signal broadcast, now it's actually much more innovative. The content part of that remains the same, it's about owning and managing and exploiting rights and the broadcaster is kind of left with the bit in the middle which is really just the ad sales and revenue creation. So if we see that content is winning in that battleground, there's probably 1 of 2 things that will happen, we will see content aggregating to content-only players, so these are people who own their managed rights and do not have the rest of the infrastructure and that would be consistent with what we're seeing in India in terms of all the rest of that becoming plumbing almost. The other version of it is that the technology company steps in and decides, I can use this content in order to accelerate the benefit I'm getting from my technology, if I come up with some plethora technology, but I'm not sure you necessarily need to own those businesses, don't necessarily need to be in the same ownership to achieve that. You know content has always relied on licensing type agreements and one of the characteristics that we like about good content is the ability to use lots of different ways of exploiting revenue, so I suppose if you see technology businesses and content businesses merging and hiring each other, like Time Warner AOL stuff, you're actually limiting the use of that content, you're competing with your other sources of distribution and this would be one of the things that would show it's working, is to move into bigger content aggregation and we are seeing that in some TV business if you look at something like Endemol where it has acquired lots of different rights in lots of different countries and exploits them in many different ways.
