Umair Haque / Bubblegeneration
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Friday, May 11, 2007

Industry Note: How Not to Invest in Media, Pt 28447178


There's another angle to the Honeyshed story as well, interestingly enough.

"...Publicis Groupe's stake in the company will be 51 percent, and New York-based Smuggler will handle a large percentage of the production duties. The initial cost of the joint venture will be $20 million, per sources."

If you had $10-20 mil to invest in game-changing, next-gen media plays, why would you put it here?

Honeyshed - even if succesful - has perhaps 10-20% of the upside of the kinds of plays more visionary investors are backing (insert venture fund that knows what they're doing here).

In short, there is an order of magnitude difference in the potential outcomes of these investment strategies.

Which is another reason why media is undergoing such deep, total disruption - even venture guys, total media outsiders, can make smarter investments than media execs.

Which is a terrible place for an industry to be - it is a structural imbalance, a playing field tilted in favour of accelerating disruption.

-- umair // 2:11 PM // 0 comments


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