Profit margins for television are shrinking as traditional players are losing control of their content. Print? Fuggedaboutit.
So where are VCs bullish in the media biz? Well, online of course. At Business Insider’s New York Ignition event, groups of VC pros offered varying viewpoints on how to capitalize the best on content. Make it cheap, keep it simple, and spread the word.
Venrock partner David Pakman said the marriage of low production costs tethered to low distribution cost is making winners as mega-media companies with behemoth operating budgets continue to lose eyeballs and readers to Internet consumers.
Aydin Senkut, founder of Felicis Ventures (which has had no trouble identifying the right content plays with its investments in Rovio and Shopify) suggested simplicity helps lure consumers. Drawing from perhaps Felicis’ biggest hit, Angry Birds maker Rovio, Senkut told the Ignition audience that his two-year-old can enjoy the hit app game, but that more time- and labor-intensive console games can “take six months” to master.
Eric Hippeau, partner with Lerer Ventures—who used to head up another content king, the Huffington Post—said social media continues to fuel growth for online content companies. Rho Ventures partner Doug McCormick said at the event that as content companies continue to execute a sound social strategy, their multiples correspond. Given Hippeau’s experience with HuffPo and its exit to AOL, he was left with no option but to agree.