Buysiders.com » Media

The cloud, explained

IP — Tue, 27 Jul 2010 22:57:30 +0000

Let us begin with an “unrelated” comment: There’s a sentence about Tim O’Reilly that seems applicable to Seth Godin and other people who are masters of networking in the “adding value to the network” sense: “It looks like Tim is just telling disconnected alpha-geek anecdotes, in his customary, avuncular, visionary fashion. What Tim‘s really doing is throwing lit matches into his network. And boy is he the guru when it comes to doing that.” – an underrated skill.

Back to the video itself, embedded inside: thought-provoking presentation on (buzzword alert!) “information shadows”, “the sensor web”, cloud computing, data collection, processing and presentation/ visualization, local marketing + micropayments, P2P credit-card payments, social network risk evaluation… and how all this is coming together to create new products and services that feed on the cloud and/or organize it. It’s still impossible to tell just how practical this is and who will make money from this, but it’s nice food for thought.

Book: The Curse of The Mogul

IP — Fri, 02 Jul 2010 16:54:15 +0000

Strategy & Business published a review for The Curse of The Mogul, which we’ve read recently. It’s a must-read for several reasons: media, capital allocation, competitive strategy and leadership. Not that we agree with Greenwald 100% – especially when he talks about telephone/cable as dumb-pipe winners vs. the lackluster future for content generators and aggregators (there is stuff/players missing there and you could think of some counter-examples). Chapter 2, on competitive strategy, is especially interesting.

That’s because it assesses the competitive strategy framework from a specific industry’s standpoint (always better than ‘generic speeches’) and it was useful for thinking about other industries as well.

The book was generated from the course Strategic Management of Media @ Columbia.

This article shares Mr. Greenwald’s view on media. We don’t necessarily agree with his view on the future of media, but it’s good food for thought and discussion.

Same old Nielsen, brand new price tag

IP — Tue, 27 Apr 2010 15:06:31 +0000

In another episode of an ages-old game, Nielsen (of TV ratings fame), formerly VNU, is set to make a triumphant return to the equity markets merely 4 years after being taken private. VNU was one of our international holdings that were LBO’d in the final stages of the booming markets in 2006 and early 2007, along with Laureate Education (International higher-education player that owns, for instance, Anhanguera in Brazil) and others. These cycles make for interesting opportunities to reacquaint ourselves with companies we admire in businesses we like, and hopefully our efforts to understand these companies in the past will again pay off.

Back to Nielsen/ VNU: the controlling group is surveying the markets for an IPO valuing the company’s EV in the $17 to $21 billion range, compared to the $10 bi LBO in 2006. That said, the company is set to earn a respectful $1.6Bi in Ebitda in 2010 (in this case not that many fixed assets, but we’d still prefer to see the free cash flow figures). The debt is $8.6Bi and the annual interest is approx. $500 million, but at least some of the proceeds would likely go towards reducing this debt.

Media usage by kids 8-18

IP — Fri, 16 Apr 2010 21:52:53 +0000

We came across a report by the Kaiser Family Foundation (a source we’ve always checked for Healthcare stats) on the media usage of 8 to 18-year-olds and it’s loaded with interesting stats (highlights, additional links and documentary inside). Some things translate to Brazil better than others, and this report is full of “traps” in that regard. Overall, it’s quite useful for those interested in Media and Tech.

Highlights:

(i) kids are spending more time on books than 10 years ago, but much less on magazines and newspapers.

(ii) iPod/MP3 penetration went from 18% in 2004 to 76% in 2009 – no wonder growth rates have stagnated.

(iii) handheld video games rose more than twofold in usage since 2004.

(iv) Black and Hispanic kids spend much more time than White kids consuming media each day, to the tune of 4.5 additional hours each day.

(v) more media consumption is correlated with lower grades.

Links:

1) 27-page Presentation about the report – lighter reading than the full, 85-page report.

2) Webcast of the presentation

Documentary: Yes, there’s even a documentary:

Buffett CEOs (and Axl Rose)

IP — Fri, 19 Mar 2010 16:11:02 +0000

OK, funny things first: Buffett playing Axl Rose is awesome. Less impressive is him playing a hip-hop artist, but it’s alright (both videos embedded inside). Viral videos can be a smart marketing tool, and these work.

Back to seriousness: Business Week had a cover article by Alice “Snowball” Schroeder interviewing CEOs who have had Buffett in their boards, as advisor, friend, whatever. Interesting read. There was an entire book on the subject a few years ago, but it focused on Berkshire subsidiaries and frankly wasn’t all that great, although nowadays it does help to evaluate some potential successors.

By the way, the Business Week section included this article by Peter Buffett, Warren’s musician son, about how his father handled money with him. Nothing new, but always interesting.

The videos, as promised:

1) The Business Week video on Warren Buffett:

2) Buffett as Axl Rose (the ballad of customer service)

3) Buffett the hip-hop artist (from GEICO’s sales reps annual meeting, Buffett is on around 4:00)

Quick update on Netflix

IP — Mon, 15 Mar 2010 18:09:52 +0000

We’ve discussed crowdsourcing and Netflix more than once. That it works for some uses better than for others is pretty clear… But Netflix has apparently messed up the database used in the original contest and that allowed some contestants to identify the actual people behind the movie choices, despite the promise of privacy. Needless to say, the FCC wasn’t too happy about it and lawsuits ensued – and Netflix had to cancel its “Contest 2.0″, at least for now.

Doesn’t mean that the tool doesn’t work, it just means that you have to be careful using it. Talk about hitting your finger with a hammer!

Top investment since 1938?

IP — Wed, 24 Feb 2010 18:48:02 +0000

The first comic book to ever feature the Super-Man character, Action Comics #1 dated June 1938, was just sold for $1 million. Considering its original price of $0.10, this is an approx. 25% nominal and 21% real IRR for the past 72 years. Eat you heart out, Warren Buffett. Bonus links inside.

Still on the subject of nerds making money, check below for a very nice PBS documentary about the history of the personal computer. It was made around 1996, we believe. It explains very well what happened, with interviews with the main characters such as Paul Allen, Bill Gates, Steve Jobs and Steve Wozniak.

Triumph of the Nerds 1 of 3 (50:37)

Triumph of the Nerds 2 of 3 (50:46)

Triumph of the Nerds 3 of 3 (50:38)

Buffett pearl: 1998 speech

IP — Tue, 02 Feb 2010 20:21:31 +0000

In this speech to University of Florida MBA students Buffett was particularly expansive regarding his processes and methods, and this alone makes this video worth the time (some 90 minutes). The fact that it was October 1998, a pivotal time in the dot-com boom and just after the LTCM imbroglio makes it even more interesting. And there’s a download link to guarantee this doesn’t go away anytime soon, but you can watch an embedded version right here if you read on.

We don’t have any intention to be the “ultimate source for all things Buffett”, as a lot of people already do a great job at this and we thank them for uncovering these pearls. But this video is special. The parts on “moats” add up to some of his most detailed comments yet on the subject.

We don’t think it’s any exaggeration to say that Buffett has transcended the investment realm and that this is interesting for people in all walks of life. We’re certainly making backup copies.

AOL TimeWarner, ten years later

IP — Tue, 12 Jan 2010 18:37:01 +0000

The New York Times has a feature on the deal’s 10-year anniversary, and the best part by far are the videos where Gerry Levin, Steve Case, Dick Parsons and Robert Pittman (the former COO) are very candid, more than we would imagine. From the interviews, found in the “Interactive Feature” link, it seems that the guys from AOL knew what they were doing (using the admittedly expensive AOL stock to secure value). To hear Ted Turner describe the “other end” of the deal is almost painful.

One must remember that some seriously talented fund managers got burned shorting AOL at a P/E of 100, 200, 300 or 400 – only to see it climb to the now-absurd level of a 700 P/E ratio.

Zynga and “Web 3.0″

IP — Thu, 31 Dec 2009 21:20:06 +0000

Anyone who has ever seen his friends posting that they need help in Mafia Wars or that they just won a big hand of poker has come across this company. Zynga Games specializes in games for social media platforms such as Facebook and MySpace. Given the huge user base – Facebook is in the 350mm user figure – and the web-based, easy-access, low-requirement nature of their games, their users also number in the millions. Tens of millions, in fact. And many of them pay cold, hard cash for virtual goods to spice up their gaming experience. In fact, Zynga might well be making more money with Facebook than Facebook itself is.

In paper, the business model seems great. What’s hype and what’s real? We’ll probably get to know this soon, since Zynga is supposedly preparing for an IPO. And whatever becomes of it, it’s a huge reminder that disrupting technologies don’t necessarily imply that the inventors will make the most money – in some cases, any money. For new and old industries, always look at the entire value chain, be it suppliers, service providers, etc.

Mark Pincus, Zynga’s CEO, has been in such a media blitz that’s hard not to believe the IPO rumors. Here’s a collection of articles and videos regarding Zynga or its CEO:

LINKS:

Update (Jan. 4th): The Interactive Entrepreneur – NYT, Jan. 3rd 2010 – Social media in Academia? Yes, but with a business twist: students have to come up with a business plan and present to VCs and whatnots. Some ventures have even taken off. It was inevitable, and as usual we’re skeptical, but if it serves as a shortcut for good ideas…

Fortune’s Brainstorm Tech blog filtered by the “Zynga” tag – the whole page is an interesting read.

Zynga raises $180mm – VentureBeat.com, Dec. 15th ’09 – it’s the same russian investor (Digital Sky Technologies) who had recently invested $200mm in Facebook.

Is Facebook the future of micropayments? – CNN.com, Nov. 12th ’09

Virtual goods start bringing in real paydays – NY Times, Nov. 6th ’09

Inside the App economy – BusinessWeek cover story on Oct. 22nd ’09 (includes the 3rd video on the list below).

Zynga hires seasoned games exec – Joystiq.com, June 30th ’09

VIDEOS:

1) At Charlie Rose, Dec. 29th 2009 (5 1/2 minute excerpt of the roughly 15-minute interview):

2) Two videos at CNN, Dec. 17th ’09:

3) At BusinessWeek.com, Oct. 22nd ’09 (annoyingly, this video loads a 15-second add that can’t be stopped)