New Media for a New Era- Why I’m Investing Big Bucks in New and Old Media
Chances are you are reading this article from your mobile device and there is an 80% probability that would be your smartphone. If not, you were most likely preoccupied browsing videos, listening to your music compilation or watching television. The point is, people are consuming more media today than in any other period in the world’s history. And there is no turning back; which is why I’m investing big bucks in new and old media.
In 2015, a study by ZenithOptimedia revealed that people spent 490 minutes or more than eight hours of their day on some form of media. Television was the primary medium at 3 hours per day followed by the Internet at 2 hours per day.
Fast-forward to 2017 and the same report estimates that people would be spending 506 minutes or 8.4 hours per day consuming media. The Internet has taken the lead from television. Average daily Internet media consumption has been increasing at an exponential rate since mobile became the dominant source of online traffic in 2014.
Old and New Media Together Equals Great Opportunities
Technology has made it possible for people to access information faster, easier and more conveniently. Instead of killing off old media like the popular 80’s hit “Video Killed the Radio Star”, technology has bridged its differences with new media.
Old media is best represented by television, film, radio and printed publication. You can also include theme parks, stage shows and concerts that provide entertainment.
New media is anything and everything online. You have social media, community blog sites and other platforms that serve to distribute text, image and video content.
Television and film producers have embraced the digital possibilities presented by new media. Television shows and movies are marketed and popularly promoted through social media channels such as Facebook and YouTube.
Film studios hire digital marketing agencies to develop online campaigns that would generate buzz through the production of viral videos. “The Dark Knight”, “The Hunger Games” and “The Girl with the Dragon Tattoo” are good examples of movies that used social media to further push their box office profits.
Content creation has become a big thing in business development. Websites that consistently publish high ranking blogs bring in large followers that become attractive for companies to place ads in. Facebook has slowly and steadily transitioned from a social media platform into a media agency because of its large base of 2.07 Billion monthly users.
Understanding the Media Industry Value Chain
To understand how investing in media presents opportunities to make money, let us take a look at the typical three level value chain prevalent in the industry. There are three levels in the media industry value chain:
Level 1 – Content Producers
This is where it all begins. Content producers include digital marketing and advertising agencies, creative concept ad houses, film studios and television producers.
They are tasked to produce original content for clients or sold to aggregators. Many companies are outsourcing content to third parties to reduce cost and to capitalise on the agencies’ core competencies.
Level 2 – Aggregators
These are the parties who purchase the content and then enter into long-term arrangements with distributors. Examples would be television networks, online news information sites and other special interest sites.
Level 3 – Distributors
Distributors provide the avenues or channels for content to reach consumers or their target market. Examples would be cable and satellite TV operators, telecommunication companies and online platforms that require monthly subscriptions for user access.
Is the value chain strict, restrictive and inflexible? No! A content producer and an aggregator can also become a distributor. Case in point is Comcast.
The company produces its own shows but also functions as an aggregator through its ownership of NBC and distributes content to viewers through its cable network Time Warner.
The Role of Media in the World of Sports
When basketball superstar LeBron James said he would be interested in buying equity in his current team, the Cleveland Cavaliers, it’s not because he sees dollars and cents in selling tickets and merchandise. He looks at it as an opportunity to expand his media empire.
James has already started building a career outside basketball with his media company, Uninterrupted which produces videos and real time digital short films about athletes. It has secured a $15.8 Million investment from Warner Bros. Entertainment and Turner Sports to produce more content and attract new partners.
Bob Higgins who owns the professional hockey team, Portland Pirates, says the money in owning a sports team does not lie in ticket sales but in sports media content.
In 2013, Higgins put up Causeway Media Partners with Mark Wan who is co-owner of the San Francisco 49ers and Wyc Grousbeck, CEO of the Boston Celtics. The company focuses on producing sports media content which is projected to become a $60 Billion industry.
Causeway has generated investments upward of $115 Million from team owners from the NFL, the NBA and MLS. Investors hope to earn returns on their placement by sharing in profits from broadcasting rights and ad revenues.
Conclusion
The ever increasing influence of media on consumers makes it a lucrative investment in the years to come. Technology is ever- evolving; it will always move forward, progressively working to make life easier by improving accessibility to information.
Smartphones are expected to hit more than 6.1 Billion in 2020. People will continue to devour content wherever they are.
The best time to invest in media; old and new, is now!
The industry is still in its growth stages and will provide you with numerous opportunities to grow your money better than just parking it in a bank savings account.
The flexibility of its value chain makes it possible for you to manage risk and scale your involvement.
Do you have the ability to create content? Can you set up a team of skilled individuals with the creative ability to produce engaging and unique material?
Or would you prefer to become an investor and wait for the profits to roll in? Investing in media is a great proposition that could help you create wealth in the years ahead.
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