categories

HOT TOPICS

Hollywood vs. Silicon Valley

Posted on Tuesday, Feb 18th 2014

NYT has a fun article, Punching Above Its Weight, Upstart Netflix Pokes at HBO. Are we getting ready for a Hollywood vs. Silicon Valley next in Television and Film?

So far, Silicon Valley’s investment in entertainment has been limited to Gaming. To the extent we see Silicon Valley investing in TV or Film content, it is limited to Netflix investing in some original TV series, buying some distribution rights at Sundance, and not much more. Personalities like Jeff Skoll have invested in films for a while, but besides that, there is no significant and sustained history of the Valley’s investors putting money into Hollywood (or Hollywood-style) productions.

On the distribution side, the Valley is gaining ground. Not only Netflix, but also Yahoo!, YouTube, Facebook and Apple could become major players in the content production and financing business. And as we know from history, when the biggies in the Valley want something, they not only get it themselves, they also catalyze the local venture capital industry to get into the game.

And that brings us to the key question: are Silicon Valley VCs about to enter the business of financing films and TV shows next?

Here are my thoughts:

  • Most of the major social networks have immense distribution capabilities, and they want more engagement, more reasons to attract their audiences to their sites. Proprietary content is a great way to do so.
  • They also have all the infrastructure and expertise to sell ads. So, monetizing proprietary content would be really easy. In fact, online, they have a lot better targeting capability to give the advertisers better bang for their buck that they normally get on TV.
  • They are looking for additional monetization models, and subscription to channels of proprietary content is a great prospect.

For these reasons, I am inclined to bet that content financing and distribution is likely to move to Silicon Valley, while production may still remain in Hollywood.

Hacker News
() Comments

Featured Videos