By Peter Csathy
It’s SXSW time. Are you ready?
Well, I’m here to help. Here’s some easy prep for the endless conversations you will face while clutching your drink. Here’s my SXSW digital media ice-breaker.
CONTEXT? It’s been almost exactly one year since Disney snapped up mega-MCN Maker Studios for a mega-price-tag ranging from $500 million to $950 million.
THOUGHT-PROVOKING 2-PART QUESTION? Too high, too low? Smart deal, dumb deal?
I know, I know, the vast majority of you will immediately dismiss the question itself — undermining its essence by refusing to give it any semblance of merit. In other words, most of you will now excuse yourselves, find the nearest bartender, and ask for your next drink.
But, hold on there cowboy. There are lots of reasons for Disney to do that Maker deal. In fact, lots of excellent reasons.
So, here we are, one year later, SXSW-ing. How are things different now in the video world from where we were one year ago when we last partied in Austin?
Alas, how do I count the ways?
Just think about the last 12 months. Just think about the pure exhaustion you felt (and continue to feel) every time you checked your favorite digital media publication — only to find yet another mega-deal or mega-investment in the MCN/YouTube economy. Since Disney/Maker, we have heard a steady — and accelerating — drumbeat of hundreds of millions of dollars of investment and hundreds of millions of dollars of M&A in connection with new digital-first video companies (my company, Manatt Digital Media, laid these out in this year-ending infographic — and also in this MCN “Score Card”). I recently discussed related themes in this recent post in which I lay out some of the most recent deals in this space. Consider these your relevant “cheat sheets” for plane reading as you fly to Austin.
But, here’s the main point in all of this — MCNs are “happening”; they are very real, and very now. They are not a fad. Why? Because an MCN represents so much more than its frequently dismissed and limiting acronym suggests. An MCN symbolizes the fundamental transformation of the media and entertainment business in which we find ourselves today — a transformation fueled by mobile-first, millennial-focused video content that is significantly more advanced today than it was when we found ourselves in Austin one year ago.
The pace of this transformation is incredible. And this breakneck pace demands bold actions that may make or break companies — whether they’re small startups or major media and entertainment giants.
Quite simply, it is “go” time. Time to take action and get smart, fast.
We are seeing this sense of urgency at real scale for the very first time in the “traditional” media and entertainment business. I hear it in virtually all of my conversations with industry insiders. Only one year ago, the vast majority of senior level studio execs (I’d peg the number at 90% or more) had one of four reactions to news of the Disney/Maker deal:
- “Who is Maker and what is an MCN?”
- “Why do I care about Maker and MCNs when I have a real media business to run?”
- “Why would anyone pay anything for an MCN (let alone what Disney paid)? — they aren’t profitable, after all, are they?”
- Or, at best: “Interesting, let’s see how things play out and learn from the other guys’ mistakes.”
Well, my friends, that ain’t the case today. Now, FOMO is in the air. It is pervasive. Disney/Maker and its endless MCN progeny of mega-M&A and mega-strategic investment have flipped the media and entertainment reality (or at least perception of it) on its head. Now, the MCN alphabet is required learning in the studio classroom. And now, it’s not so much a question of “if” we should get into the mobile-focused, digital-first, millennial-fueled MCN/video game entertainment, but rather, “how” and “when.” And, many of the traditional media giants now correctly fear that others will take the remaining MCN crown jewels sooner rather than later — a smell of scarcity is very much in the air.
So, my fundamental advice to all who listen — advice which I pontificate passionately in virtually every conversation — is this: Take action! Make your moves — or at least, a move (perhaps a significant strategic investment at a minimum). This is no time to waltz delicately and methodically into this feverish dance. It’s time to partner up. If you hesitate, you just may find that your erstwhile dance partner has found another suitor.
This is a time to be aggressive. This is a time to experiment and damn the torpedoes. It’s innovation time. It’s transformation time. And, it’s opportunity time…for those who have the courage to seize it!
Media executives: “Do not go gentle into that good night…”
Check out more of Peter Csathy’s thoughts on the digital media space at the Digital Media Update.