In the past few weeks and month, I have become swamped with more deals. Just as the layoffs and belt-tightening began at media companies, the willingness to turn to third parties for content shot up.
Previously, a lot of media companies were contemplating the “build or buy” conundrum:
From our Top 10 Predictions from 2008, here is #6:
6- Video Content: Build, then Buy
2007 marked a year where many media companies attempted to build video content offerings, 2008 will see some acquisition activity as traditional media companies look to scale by buying into the space. This will surprisingly allow some print media companies to have more robust video content offerings on their web sites than TV companies, who continue to view the Web as a threat to their core TV advertising revenues.
Truth is, I know first hand from our talks with these media companies, the year went by and nothing: very few companies accelerated their video plans and offerings because they only saw digital pennies ahead. I touched on this in Online Video and Old Media: Those Who Can Won’t, and Those Who Want Can’t. They cannot be blamed. But now that companies are forced to lay folks off, forget about any new content development plans. Those plans - if any existed - will be shelved. However, the need for new video content will only spike, after all, as folks lose their jobs, they tend to spend less and consume more content and entertainment at home.
Since user generated content only goes so far to whet consumer appetite, the demand for quality professional content goes up, yet the slower economy means less advertising dollars, which gives less of an incentive to big media firms to open up their content archives and publish online… so in this vacuum a firm like WatchMojo.com will actually benefit from the meltdown… but of course no one likes seeing the wheels come off the economy.
Now other companies like Revision3, Next New Networks, and a few others who produce content can win. But the problem for them is that they all raised way too much money, have high burn rates, and need to first adjust and scale back, or as they say “align” their businesses with realities. Revision3 did this last month. I suspect N3 might have to, as well. I’d rather they not do that and charge ahead… but their VCs will ask for burn rates to come down.
In that chaos, we’re sort of lucky not to have to do any of that and can charge ahead, expanding on all fronts. It’s sort of ironic, because I spent most of 2007 trying to raise money and could never close the deal (for many reasons), but in 2008 it forced us to do less with more more with less (Ed. Note: Freudian slip, perhaps?) and generate actual revenues. That is why I am pretty bullish… though feeling upbeat about one’s company is pretty irrelevant when you see people losing their jobs right and left and signs of despair. Sadly, this is what America has come to after decades of greed and excess.
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