One by one, they pick up the baton and run with it.
News Corp. Chairman and Rupert Murdoch had mentioned how he had become enamored with the Web because with very little investment, he got abnormally positive returns. So off he went.
After remaining largely quiet for a decade, News Corp. got serious about the Web in 2005 and spent nearly $2B buying up Intermix (parent of MySpace), IGN Entertainment (that’s how they inherited me for a few months), Scout Inc., and then capped off 2007 with purchases of Strategic Data Corp., Photobucket, Flektor.
But, by 2007 the buying spree was over. His Chief Buying Officer Ross Levinsohn left for greener pastures, launching his own investment fund with former AOL Chief Jon Miller, merging with ComVentures.
Then last year, CBS picked up the mantle of Chief Acquisitor by buying Last.fm and Wallstrip. While relatively small, you could see there was more in store, especially with former Allen & Co. Quincy Smith being brought in as CEO of CBSI, reporting directly to CBS CEO Leslie Moonves, and Yahoo!’s former corporate development executive Michael Marquez rounding up the team.
We then commented: is CBS the new News Corp. in that regard?
Perhaps. Today they made it official: CBS spends $1.8B to buy CNET. There will be those who say this was a lot of money for an old Web company, but CNET is a proven business with $400M in annual revenues and over 100M global users, propelling CBS to become a Top 10 Media Property in the US.
Of course, we always liked this idea, even prompting CBS to do so just back on April 14th.
The point is: TV-based media companies need to buy and buy big time, otherwise the future looks awfully like print’s past: downwards and smaller.
Paid Content refers to a NYT article on CBS which calls for the company that Bill Paley built to make digital acquisitions, which begs the question: should they go for a big purchase or make small moves?
Of course, answering that question alone without addressing the backdrop to that question yields an incomplete picture.
CBS has hit some rough patches, according to Paid Content:
The parent company is under a mini-siege of sorts about
a) its performance,
b) Leslie Mooves’ salary,
c) Katie Couric’s disastrous tenure at the company,
d) layoffs (even on the digital side, as others are ramping up) and other issues (…)
e) CBS’s need for an acquisition is becoming apparent. Some CBS executives privately agree.
All right. I want to dive in and comment on e) but let’s run through this list quickly.
a) Its Performance
We’re not sure if they are referring to its financial performance or its stock’s, either way:
As per the NYT:
“Without the cushion of Viacom’s other properties, CBS has been more exposed to the struggles of the advertising market. In 2007, it earned $1.25 billion, down from $1.66 billion the year before. CBS stock closed at $21.40 on Friday, compared with $30.99 a year earlier.”
While no company or manager can control what happens to the stock price, I think big media will see a lot of revenue loss over the next few years. Print-centric media companies shrank, why would TV or radio-centric media companies be any different in the next wave of the Web’s growth?
After all, 1994-2003 saw text-based media explode online, 2003 is about audio/video-heavy media.
CBS is seeing this sooner and faster due to its exposure to TV and radio. However, they are strong in outdoors, the challenge there is the upside there won’t account for the downside in more traditional media.
So all hope signals point to online… which explains why:
“On Monday, the company’s interactive unit will officially open a fully staffed office in Menlo Park, Calif., in Silicon Valley, to stir innovation and content development.”
Ironically, the CBS Interactive brass gets the Web quite a bit, but it’s true that they have been overly cautious, too. Being cautious is a bad thing in booming times and a great thing in corrections. The problem for CBS is that the correction is coming offline and online continues to charge ahead… so indeed, CBS does need to make some bold moves. But what are those moves?
Last year, we suggested an outright merger with Yahoo! With MSFT’s $45B gamble, those bets are off (hmm… are they?).
b) Leslie Moonves’ Salary
Last week Henry Blodget wrote: “CBS CEO Moonves Gets 29% Raise, Just Reward For Job Well Done“.
Clicking through, I realized he was being sarcastic by pointing to the seemingly inverse relationship between Mr. Moonves salary and CBS’ performance. While I appreciate Henry’s position, the truth is that CEO pay is determined on a number of things, frankly.
It’s also about the demand and supply for talent. As the CEO of CBS, Mr. Moonves could probably command a much larger salary elsewhere, if CBS’s Board wants to pay him $100M because that is what it takes to retain him, I am not sure CBS or Moonves should be blamed. For the record, he did not make $100M but rather $37M. Is that a lot of money? Yes. But the company made well over a billion dollars in profit and $14B in revenues. Of course, I’m an executive so my perspective is going to be different than that of an analyst or journalist.
But my point is: running a shrinking business in a mature market is not something most executives would embrace, to lure the best (or retain them), guess what? It takes a generous compensation program.
c) Katie Couric
Don’t care personally, but indeed, this is becoming an albatross and if indeed she is that horrific (I don’t watch TV), it’s time to try something else. I recognize she might not be best suited for news, but surely there is plenty of things she can be doing for CBS in other capacties (infotainment, mainly).
d) Layoffs
Layoffs are always demoralizing, especially when a company is making over $14B in revenue and remains profitable. But what about a case - like this one - when the company is shrinking? This is a tough question.
My gut says Jack Welch’s “the lowest 10% should leave” is not a bad thing… so while I don’t want to dehumanize the layoff dynamics and their effect, I think it’s unfair to question the layoffs.
Of course, I do wonder why layoffs are taking place in online areas… which is what both Paid Content and NYT refer to. But just bear one thing in mind: many traditional media companies are not necessarily well structured in new media; divisions and structures are sometimes borne out of legacy organizational systems and sooner or later a correction or adjustment is called for. If this is the case, then I don’t think it’s fair to bash CBS on this point.
e) Acquisitions
The question remains: should CBS make one big hairy and ambition acquisition or should it buy a number of smallish companies and roll them up and/or foster their growth?
For the record, CBS has done both. In fact, it’s done everything including investments in Spotrunner, Joost and many others. In terms of acquisitions: Last.fm was a mid-sized / big one; Wallstrip was a small one.
What would you do if you were Quincy Smith and company? Buy? Merge? Sell?
ACQUISITIONS:
You know what, I admit a small acquisition won’t move the needle, but a major acquisition won’t either. Who would they have bought?
- Bebo? Is a company that marketers love really well-served by serving advertisers social networking inventory? Nope.
- Facebook? Too expensive to buy. Nothing to see, here (perhaps a merger? See below).
- Gawker Media? That might be an interesting addition. But I think Gawker Media founder Nick Denton wants to become CBS, and not sell to CBS. Anywa, Gawker Media lags in video, CBS needs to look ahead and not look back.
- Speaking of video, one company that might position it for future growth is Blip.tv, but Blip.tv does not own any content… so that is a risky move because CBS might buy a great video platform with amazing bells and whistles but then lose all of the content therein. [Disclaimer: Blip.tv is a partner of WatchMojo.com]. In the same broad category as Blip.tv are Brightcove and Video Egg. Bright Cove also does not own any content and is way too expensive, having raised $80M in funding. Video Egg ain’t cheap either, with $40M of funding in the tilt.
- Then there’s all of the YouTube/MySpaceTV competitors: Revver, Veoh, Metacafe, DailyMotion, Break, etc. Mind you, CBS invested in Joost… so what message would that send? As well, Revver was on the auction block and I presume CBS looked at it and then balked. Again, none of those companies own any content, CBS needs to be stronger in web content. That would be the hedge for CBS going forward, of course, it also needs better distribution. I see CBS works closely with Veoh… but is Veoh big enough as a distribution source? [Disclaimer: WatchMojo.com syndicates video to all of the sites listed here]
- Craigslist.org? Not sure Craig Newmark would sell, no matter how progressive Quincy’s team might be. This is Big Media after all… but Craigslist.org would not unleash CBS’ digital revenues.
- Glam Media? That would be a shot in the arm with regards to bolstering its female audience online… but here’s the problem: female audiences still watch TV… what CBS might be better suited for is getting access to a men’s audience. [Disclaimer: Glam Media is one of WatchMojo.com’s syndication partners, too]
- Digg? Not a fan of this one, frankly. Maybe a combo Revision3 / Digg? Even less of a fan of that. Revision 3 is way too niche: it’s too tech-oriented and relies on two hosts, largely. Given how Kevin Rose’s interest waned from Digg to Revision3, then to Pownce, I am not sure he’s buyable because he’s the main asset of Revision 3. [Disclaimer: if you look very broadly at all video content, then WatchMojo.com is more or less competitive to Revision 3, though I view them as rather complementary to our programming].
- Federated Media? Too tech-focused and they don’t own any of the content on the blogs they rep. Big media needs to own content to make it worth their while. Sorry, but that’s just the way media works.
- Gorilla Nation Media’s audience might be a better fit, but as an advertising representation firm, it faces the same challenges: You are buying a stack of contracts that at any point could be severed. Unless you own the underlying content, those contracts are not worth the paper they are printed on.
- Heavy.com? They have a men’s audience, for sure. But if CBS is to buy a destination, it needs to be an enormous destination, I am not sure Heavy.com would move the proverbial needle. In fact, in 2005, News Corp. bought IGN Entertainment, but IGN was doing over $70M in revenues on the strength of its Media Properties (IGN.com, RottenTomatoes.com, etc.), had a lot of technology (in-game advertising + digital distribution of movies, music and games). Moreover, IGN Entertainment was far and away the leader in terms of men’s 18-34 audiences.
However, if Fox Interactive Media has become a new media behemoth, it has more to do with MySpace’s burgenoning audience than with IGN’s properties. That being said: IGN Entertainment does give a lot of content and audiences that marketers look for. The challenge for IGN is that a major chunk of their inventory comes from their message boards, which are notoriously hard to sell and monetize.
This being said, when one looks at how instrumental MySpace and IGN’s acquisitions were, it’s fair to say that the ROI has hitherto been higher on the MySpace deal. I am surprised at this, I won’t lie. But this lesson would encourage CBS to look for a MySpace and not an IGN.
I am not that familiar with Heavy.com’s business, frankly, but I am not even sure if Heavy is an IGN.
- IAC is way too e-commerce oriented. Its search engine Ask.com does not really fit with CBS, either. So pass.
- There’s Meebo, but at $250M or more in value… I am not sure if CBS would even know what to do with it. And, who are we kidding: do marketers really even want to advertise in instant messaging communications? That one makes sense in theory but in practice? Not sure.
- There’s the barrage of search video tools: Blinkx, Pixcy, etc., but CBS remains a media company; it should be technology-centric, I think. What I mean by that is that its content should be compatible with all tech platforms to make it was widely available as possible.
- There are a number of ad networks: Tribal Fusion, Specific Media, Casale Media, Adconion etc. I think the obsession over ad networks will pass. Moreover, a lot of media companies will build and launch their own, which is a mistake as well. I am not sure if CBS should plunk down $100-$500M on an ad network. Advertising.com rescued AOL’s butt because AOL was transitioning from a walled garden to a normal website but the fact remains, that says more about how poorly AOL was doing than how great Advertising.com has done (for the record: it has done great).
Valueclick is publicly traded, but expensive.
If it was interested in ad networks, it might as well skip over display ad-based ones and dive into video networks such as Tremor Media or Broadband Enterprises. Again, I am not sure being in the ad network business is the best capital allocation move.
- It could - much like how NYT invested $29.5M in Wordpress - make a bid for Six Apart (makers of Movable Type) or even Wordpress. But, again, I am not convinced it makes sense for a media company to own a platform without the underlying content. News Corp. buying MySpace made sense because the content on those sites become News Corp. property, or at the very least, MySpace gets a license to profit from it…
- Slide? At the company’s last $500M pre-money valuation, I think CBS would gain street cred in one block on SF by buying Slide but see Wall Street punish it. Hey, just being honest here folks: that is one expensive widget company with moutain-fulls of unsellable inventory!
- There’s TheStreet.com, though I am not sure if it’s big enough or whether CBS really wants to get that deep into finance and investments. Bear in mind Wallstrip was all about investing… so this would be a doubling down on one category. Moreover, at a market cap of $250M, it would eat a lot of money the company could spend elsewhere.
- CNET remains very tech-oriented but it has embraced a lot of lifestyle properties, too. In fact, CNET would be a good fit with 100M uniques, $400M in revenues etc. In fact, trading at $1.2B, it’s not that expensive. CNET would give CBS some web DNA and CBS would open up swarms of traditional advertisers to CNET. This could be the best move yet: unlike most other options, CNET owns a lot of content. It also owns a lot of URLs such as TV.com that with CBS’ help could come to life.
Updated: Oh, wow, they listened to me: it’s official.
MERGERS
- CBS could in fact merge with Yahoo! I wrote about this and frankly, this remains an option.
- It could merge with Facebook; won’t happen. At a market cap of $14B technically Facebook is worth roughly the same as CBS. This would be a bizzarro world deal where Facebook trades in growth for CBS’ $14B in revenue… but this one is so loopy.
- As crazy as it sounds, it could undo the merger with Viacom; won’t happen.
SALE
What about a sale to News Corp.? News Corp. owns FOX, it would love to own CBS. But for this to happen, it would mean Sumner Redstone and my old boss Rupert Murdoch would have to come to terms; won’t happen.
Incidentally, last Friday, GE lost 12% of its value, or $40B. It could have bought two CBS’s. By buying CBS, GE’s NBC Universal would own two of the three main networks, making this an impossibility.
That same obstacle is present in a sale to Disney, who owns ABC.
CONCLUSION
As you run down the list… you realize that all CBS is actually a great media company that just needs some tweaking. Yes, indeed: “Nobody likes negative growth, from the guy who shines shoes to the C.E.O. Everybody feels the pain” the truth is no one wants to blow something up either.
My two recommendations for CBS:
- Buy CNET for $1.5B - $2B (that would be a 25% to 66% premium), which would take its digital revenues from “$200M” to $600M. Combining CNET with Last.fm would also yield a lot of upside in digital music and video tie-in’s. But even then: for a company with $14B in annual revenues, does $600M mean much? Many analysts only give credit to a media company’s stock if digital revenues account for 10% of total sales. Even News Corp. or Disney do not claim that.
CNET remains one of biggest acquisition targets that represent meaningful revenue opportunities, and even that won’t move the needle. So what other options are there?
OR
- Merge with Yahoo!
Actually, there’s also one more option:
GO PRIVATE?
One way that no one will care about a) Performance or b) Les Moonves salary is if it were not publicly traded. Moreover, Wall Street is being unreasonable: yes the company is shrinking, but it will take time for digital revenues to grow, anyway. However, if someone came along and took CBS out at $20B, I think a lot of shareholders would buy that (or I guess, sell for that).
It then allows CBS to d) clean house if they so choose to (and will have to). Kate Couric becomes moot in the grand scheme of things… but most importantly, it will allow CBS to roll up a number of smaller web properties, content producers and tech applications to bolster its overall portfolio. In 4 years - when video advertising will be $7.1B in the US (up from $1B) and all online advertising will be nearly $100B in annual expenditure - it can then be go public again…
This might very well be the best course of action. The question remains: does private equity have the stomach for a $20B debt purchase? With $16B in annual revenues… I think so.
All righty, that was a great use of 40 minutes of my time. Back to work.
Daily Motion is escalating the battle for #3 in their space (after YouTube and MySpace TV).
Online video advertising is growing, quickly.
Online video advertising is where search advertising was in 2000-01: a major part of the web ecosystem desperately looking for a business model.
Unlike search - where traditional media companies failed to invest and even new media companies gave up in favor of portaldom - a lot of companies are vying for online video supremacy. My read on it is that we will never have a Google of video. That’s right, even YouTube - incidentally owned by Google - won’t command the kind of revenue within its segment that Google does. The reason for that is lack of competition and monetization ability. On the former, YouTube has a lot of competition in the monetization race.
Either way, looking at the stats, the numbers are impressive:
An estimate of the US online video ad market for 2009 - set in 2004: $657 million | Source.
An estimate of the US online video ad market for 2009 - set in 2005: $1.5 billion | Source.
An estimate of the US online video ad market for 2010 - set in 2006: $2.3 billion | Source.
An estimate of the US online video ad market for 2010 - set in late 2006: $3 billion | Source.
An estimate of the US online video ad market for 2011 - set in 2007: $4.3 billion | Source.
An estimate of the Worldwide online video ad market for 2011 - set in 2007: $10 billion | Source.
An estimate of the US online video ad market for 2012 - set in late 2007: $7.1 billion | Source.
An estimate of the US online video ad market for 2012 - set in early 2008: $6.6 billion (all broadband at $12.2B) | Source.
It’s thus not surprising to see the sheer volume of money that is being invested in the space, here is an incomplete snapshot:
Judging from that, investors better be patient because only YouTube has exited, handsomely, to the tune of $1,650,000,000 (that’s $1.65B, in case you’re wondering). I’d like to remind everyone that more money does not equal more return, but I digress.
It’s worth noting, too, that YouTube raised less money than everyone else in its peer group but I highly doubt anyone in that group will be worth more, ever, than YouTube.
I am personally hoping that WatchMojo.com pulls the same feat in its peer group. I won’t say “jokes aside” because I am not exactly kidding, admitting that yes, indeed, we’ve raised - and spent - less than $5M to build our content and distribution, which is actually bigger than some of our peers. You might notice that I do not call the players in our group competitors because we are the bastard children of the broader video space: everyone is betting heavily on platforms and user-generated content and our category is definitely going against the grain.
Lastly, I think most of these players are pricing themselves out of exits:
- IPOs will be very hard: yes online advertising is growing quickly but I suspect traditional media (that owns rights to the content) will garner a big share of the online video ad pie. In this context, hitting $100M in revenues or more becomes very challenging, especially with the low-quality content most of these sites are trying to monetize.
- M&A becomes nearly impossible because you need to sell for more than you have raised, and judging by Revver’s fate (who raised $12.7M and sold for less than $5M) that becomes quite hard.
It’s a good thing I am no low-expectations mofo… just because we have not raised boatloads of cash (yet anyway) does not mean we’re not gunning for a big payday one day, but realizing that such a day might not materialize tomorrow, I respectfully think a lot of the companies in the broader video space and our content creation space in particular have dug too deep of a hole for themselves.
To each their own.
This is a work in progress, I am adding CMS platforms (Brightcove, Maven, etc.) and CDNs (Limelight, Akamai, etc.) as we speak. If you have more companies and funding amounts, or if I made a typo, leave the correction in the comments or email me at ash@mojosupreme.com.
Expect to see a lot of consolidation in the broad video space.
- the fight for #3 in file sharing social networks will cause many (DailyMotion, Metacafe, Veoh, Revver, Break) to consolidate and merge to remain viable against YouTube, Yahoo!, MySpace and MSN.
- ad networks and advertising platforms will also see some shakedown (Yume, Scanscout, Brightroll, Tremor Media, etc.)
- today we saw content producer LX.tv get acquired by NBC. See our thoughts here.
Just now, metric company Vidmeter got acquired by Visible Metrics. It’s worth noting that Vidmetrix is a tool by Vidmeter, spawned from Holt Labs, whose founder Bri Holt previously sold SocialMeter.com to Adaptive Blue, Read Write Web columnist Alex Iskold’s Union Square Ventures’ funded company, USV is Fred Wilson’s fund, who incidentally was an angel investor in Wallstrip, Howard Lindzon’s video blog on the stock market, who sold to CBS and then proceeded to invest in Vidmeter’s competitor Tubemogul (on tomorrow’s Six Degrees of Separation, we’ll look at…).
All to say, Holt deserves some credit for identifying these niches and then creating products that catch the eye of would-be buyers, quickly.
We’ve used Vidmeter’s Vidmetrix. Also in the market are TubeMogul, as well as Hey Spread. Veoh too has a multi-upload tool function, but Vidmeter and Tubemogul also offer analytics, which makes them a more interesting acquisition target to more companies (think Nielsen, comScore, Google Analytics, Webside Story, etc.) I can also see a company like CBS acquire Tubemogul, don’t ask me why, just a gut (ie. Think Howard Lindzon is Kevin Bacon).
This is the year video goes mainstream and many companies that were thinking “Build” shift gears and decide to Buy. the dollars are shifting away from TV way too fast for cash-rich, time-restricted media and technology companies to sit around.
Disclaimer: WatchMojo.com has various working relationships with both Vidmeter and Tubemogul, and distributes content on Veoh. We’ve been rooting in equal parts for both Vidmeter and Tubemogul and fully anticipate them to have a successful exit too, soon.
The following is a perpetual-work-in-progress. Once you start to compile a list of mergers and acquisitions, you realize why it’s nearly impossible to have a complete list. We are quite confident that the following is a very good, comprehensive list of the largest, more notable deals… but it is not - and no list will be - fully complete because there are too many countries around the world and too many industries to report (it is highly possible that the Wall Street Journal or Financial Post, for example, has such a list… but it would be thick and unwieldy).
We have included:
- many industries
- have not adjusted for inflation
- mergers (be it all cash, cash/stock, or all stock)
- acquisitions (we have excluded partial acquisitions)
- private equity deals.
It is certainly not complete, send me any ones you think I am missing or industries you want us to add next to ash@mojosupreme.com or leave in the comments.
Trivia:
- In 1981, when DuPont acquired Conoco for $7.8B, it was the biggest deal of all time. But adjusted for inflation, that remains a $20B deal by 2008 standards.
- KKR’s private equity deal for KKR remains the biggest buyout when adjusted for inflation, but in actual dollars it has been long surpassed.
Related on HipMojo.com:
In web spheres, the decision usually boils down to build vs. buy.
The term is build, because usually it involves technology. In light of today’s announcement that CBS was buying Wallstrip, a creator of online content targeted to the finance vertical, the argument that TV companies can simply create (or should create) programming for the Web both loses and gains some momentum. Scott Karp touches on this in his post. He’s not alone.
Despite the conventional wisdom, TV companies cannot simply put all of their content online, doing so is suicide as it risks to cannibalize their $250B offline revenue streams. We highlighted this in “Understanding TV execs angst and envy.” But not doing anything means a slow death, perhaps, like that seen today by print companies. The solution frankly was never to put all of the contents of a newspaper or magazine online, because even those who are aggressive like the Chronicle end up having to lay off 25% of their staff! In fact, if you look at the most stable newspapers and magazines, it is those who took a hybrid approach and bought online assets. NYT / About.com being one example.
In other words, on the one hand, by buying Wallstrip, CBS is saying that they do not really want to take all of their TV/Movie stuff and put it online. Don’t get me wrong, they have, will and continue to do so to varying degrees, especially under Quincy Smith who is very aggressive with putting things out there online and as manifested by the CBS Interactive Network, but it’s also a not-so-coy admission that they do need to have an online-only strategy for content creation.
And, when it comes to doing so, you cannot simply re-assign “Jim” - a 20 year veteran of TV - to online video. You need “Timmy.” The one who enters the online video battleground with no baggage. In CBS’s case, Timmy is Howard Lindzon.
Everything from format, distribution and revenue parameters is very different online than it is offline. So on the other hand, this shows that CBS will temper migrating its offline content library to the Web with online-only content to both benefit from the continuing shift of marketing dollars to the Web while preserving the premium that currently goes to TV content.
I certainly do not want to hide my bias, as a content producer, this is arguably the single best news for us, because it totally validates the value of our modus operandi, expertise in online video, our content library and our own syndication network.
This is something I posted last week when the rumor came up:
- WatchMojo.com is by far one of the largest content producers in terms of broadband platforms, with a library of 4,000 1 to 3 minute video clips. We have content on everything imaginable: fashion, food, video games, cars, sports, travel, and much more.
- WatchMojo.com has built one of the largest syndication networks of any online-only video producer: we’re one of the few online-only producers on Joost, as a few others I can’t name yet, even though they might be live. Last year we did over 1M streams on YouTube, this year we might do 10M. One syndication partner’s revenue grew 30,000% in 3 months, etc. If you line up all video portals, we’re on all of them, in 3, 6 or 9 months when people look at reach of video content throughout the Web’s leading video viewers/sites, trust me, we’ll be pretty darn close to 75% penetration if not more.
I’m not saying, at all, that is gives us an incentive to sell the company. I am - have been and probably always will - far more interested in building a stand alone company with revenues and dare I say it profits. Those matter in any business. But if you thought it took a lot of time to build technology instead of buying it, ask yourself if it will cost more money and time to create a library as exhaustive as ours in-house or simply acquire it.
Ultimately, it’s not what I think that matters, it’s the market, and in today’s deal, Howard Lindzon and CBS just gave us one helluva marketing push.
Last week, the rumor crept up. Howard Lindzon made it official today. Congrats to him and his entire team. Well deserved. I wrote about the challenges and thrills of helping create the playbook for online video last week in the “Did CBS Just Acquire Wallstrip for $5M” post here.
VC Fred Wilson, an angel investor in Wallstrip nails it:
But here’s the thing. It’s not entirely about the content on the web. Sure it has to be good enough to attract an audience. But right now, its about way more than the content. Just figuring out how to make a show on a cost basis that can make a profit is hard. How to do it every day is even harder. And figuring out all the other stuff that I listed above is critical. Not many people have figured all that out. But if you don’t know how to do all that stuff, you can’t build a business in web video.
I don’t know if that’s the VC or user talking, but Fred is right: the content is half the story, knowing how to publish video and make it into a business is the real lesson, and experience worth paying for.
I always tell everyone at WatchMojo.com, the content will improve over time, it will change over time, but doing it is really more important. We have taken a different approach than most online video content players, Wallstrip and others are of the video blog variety, some say that we’re more of a Web TV magazine of sorts, the nuances are subtle, but the bottom line is that there’s a premium being placed on those who can build video properties on the web because economics and technology suggests that while TV and the Web (and to some extent Wireless) will blur lines over the next few years, these will not be one and the same either.
Anyway, turns out the $5M price tag might be right, might be wrong, but seeing how CBS and other media companies are getting more and more serious about video, online advertising and digital content in general, I’m not surprised seeing Quincy Smith put a big premium on a team that has been able to create value quickly and efficiently online in the web video space.
PLAY
