It has been a very hard few weeks for almost every asset class. Stocks, SPACs, The US $, Bitcoin and DOGE coin, but not for startups.
The famous Gené Teare (at least in this newsletter) writes in CrunchBase News that 2021 has already seen 166 private companies surpass $1 billion in valuation, and become unicorns. It is only May and in the whole of 2020, there were only 163. This is not a bubble. The companies in the list (see the article below) are all fast growth, revenue-generating machines focused on real human needs or desires.
The investors who find these unicorns return fabulous profits for their investors. The earlier investors returning multiples of 10,00x and more. The later stage investors returning 3–10x in short order. But it is hard to get into these companies. The leading investors in seed, venture, and growth stages have succeeded in placing capital into unicorns regularly. As I explained last week, my new startup, SignalRank Capital is focused on partnering with the leading seed funds to support them in their best companies. Our goal is to be a listed fund, enabling retail investors to benefit from our investments by owning our stock. Let’s come back to this editorial in a couple of years to see how we did. Meanwhile, go read Gené’s article.
And now this …
AT&T is having a hard year. First deciding to exit Satellite TV with the proposed sale of DirecTV. Now spinning out Warner Brothers Media and merging with Discovery as its way of exiting its recently purchased media business. Verizon selling Yahoo recently is small potatoes by comparison.
The range of choices for streaming media is growing by the second. Netflix, Apple TV+, Amazon Prime, Hulu, Disney Plus, HBO Max, Peacock, Paramount Plus, And then all the sub-brands that you can buy for additional fees, Britbox, AMC plus, Showtime, Epic, Cinemax, MHz, PBS, Acorn, Topic, Starz and hundreds more. Each of the big ones is a bundle. Disney Plus can have ESPN and Hulu bundled. Hulu can have 60 channels of live streaming. And so on.
Now there are plans to split some into advertising-supported and advertising-free versions, in return for lower subscription fees for the ad-supported versions.
There is a fight for consumer attention, with all candidates needing a great library with regular fresh content serving its preferred demographic.
Streaming has won. But who wins streaming is far from over. AT&T has realized that it does not have the nous to be in this fight, never mind win it. The Warner/Discovery deal is to intended to create an entity that has a shot in the game.
My own belief is that we are at a halfway house in a likely end game. One where we pay for what we watch, not for what is in the bundle. Everybody will resist that end game because it will shrink what we spend on unmatched media. But it will come. The bundles are largely bloated, and unwatched. That can’t be sustainable.
The smart players are producing globally licensed content for globally distributed brands and going direct to consumers. Netflix started it. Amazon and Apple joined. Now HBO, NBC, Paramount, and others are jumping in. This is our current world. In the future, we will only stay loyal if we can get what we want, when we want it, and not pay for things we do not wish to see.
More in this week’s video with Andrew Keen and Steve O’Hear.