Behind the Money: Mark Terbeek Is Down with Disruption

/ Sep 11, 2013

markterbeek

Despite almost 20 years of experience as both an executive and investor in technology and content, Mark Terbeek isn’t afraid of the word “disruption,” especially in the context of web video. In fact, during a recent phone interview, the Greycroft partner indicated that for the first 10 years of his career, he’d been waiting for it.

Terbeek has been a player within the tech sector since 1995, when he joined investment firm First Analysis. But while the pre-2000 bubble days were good to him, the clear flaw he saw in the industry was its limitations. “Most of the early stuff was search and text — no real hardcore video,” he said.

“It was kind of obvious that people wanted to do multimedia stuff, but while the idea of online video emerged, bandwidth didn’t really enable it yet. There just wasn’t a solid way to do the streaming from a practical standpoint.”

In 1999, Terbeek left First Analysis to help co-found cloud services brokerage company Jamcracker. Afterwards, he returned to the VC world, joining MK Capital in 2002. While his partners were based in Chicago, Terbeek was and remains based in Los Angeles — giving him a more content-focused perspective on the tech world.

An early project during that phase was video delivery system Kontiki, though the platform didn’t really pan out — “a good idea, but too early,” in Terbeek’s words.

When did online video stop seeming so impossible? Terbeek pointed to two milestones: first, the launch of YouTube in 2005, which made Terbeek believe that video was really beginning to happen on a consumer level.

The second? The launch of the iPhone. “They are hundreds of millions of little mini-HDTVs. That and the tablet really changed the market, because it dramatically increased distribution points,” Terbeek said. “That was when I felt confident that the infrastructure was in place — now it was time for great content. The market was ready for that.”

In March 2013, Terbeek left MK Capital for Greycroft, which counts among its investments the Collective, Klout, Maker Studios, and the Huffington Post.

One advantage Terbeek feels Greycroft has is location. “We’re the only firm based in New York and Los Angeles, and have a long history of understanding those markets,” he said. “Our team has relationships with Madison Avenue and media buyers — for startups looking to play in those spaces, we can add a lot of value.”

The key difference Terbeek sees between mainstream Hollywood and the online video world is distribution — but not the way you’d think. Instead, he believes that while the studio side of the industry thrives on its creation of new intellectual property, networks and theaters have limited distribution opportunities for that content. There are only so many slots in ABC’s fall schedule, after all.

But with the web, “there are many new ways to consume content. People are picking up on incremental opportunities. You’re not confined to traditional models — and you can find a global audience everywhere,” he said.

Mark Terbeek’s Three Companies to Watch:

Dreamworks Animation: According to Terbeek, the traditional studio animation business’s recent decision to acquire AwesomenessTV was “a really interesting sign” of how CEO Jeffrey Katzenberg is reorienting his business around how young people consume media.

Vice: “The way they’re blending a studio-branded integration business to create a new model is very powerful,” Terbeek said of the media company, which recently received a $70 million investment from 21st Century Fox. “It’s a new business model that’s emerging.”

Zefr: What Terbeek likes about the content network that also identifies licensed content is that “they’ve created software as a business model, and then their own content gets distributed by their fans. [It’s] a really interesting example for how companies are faced with these challenges.”

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