The key content streams that dominate today’s media include news, sports, education and entertainment. The impact of digital technology on each of these has been profound and their continued evolution will continue for some time to come. As a fund manager, our focus is to identify the next generation of content creators, facilitators and distributors. Those that that are redefining and transforming the media landscape. Most importantly, it is Global Merces’ role to identify and invest in the ones who have identified sustainable, repeatable and scalable growth and revenue models within the fast-moving media markets around the world.
When investing in media, the underlying asset must be exceptional and focused on content creation, ownership and/or distribution businesses with the potential to reach a global audience. Then, much like private equity investing, it’s crucial to invest throughout the business cycle from start-ups, to revenue generating growth stage and late-stage exits.
Most media assets, particularly in entertainment, are more likely to generate capital returns rather than quarterly income. Television programs are one of the few entertainment content streams that does generate quarterly revenue, often in the form of producer or showrunner role. This is the person responsible for bringing the content from idea to broadcast. These sorts of content creations are ideal for investors seeking to diversify from traditional investments such as bonds, shares and property yet still have regular income.
Creating a mix of regular income and capital growth assets requires management of multiple factors across the asset such as, the management team, the risks involved, existing relationships, quality control and a host of other aspects that may not immediately compare with traditional investments. Once you take a look under the hood though, media assets are simply that. An asset that requires similar management as bonds, shares and property. When managed by a team of experienced media industry people, media assets can potentially outperform traditional assets, who still hearken to the status quo investment philosophies of decades past, despite ongoing low than low returns.