HOW HAS THE PROPENSITY OF CHOICE
(NETFLIX, HULU, ETC.) IMPACTED INVESTING IN
THE ENTERTAINMENT AND MEDIA SECTOR?
The proliferation of digital video consumption outlets has accelerated one of the most significant secular trends in the media industry today—audience fragmentation. Remember the era when a family of four would
sit down to watch a television show at an appointed time?
Doesn’t exist anymore. The availability of on-demand content from digital players like Netflix and Hulu, together with
hundreds of linear channels from cable and satellite providers, has made it more difficult to aggregate mass audiences.
As a result, providers are highly driven to produce compelling original content that can’t be found elsewhere, which
in turn has fomented a boom in the volume of content being
produced. Showing Seinfeld reruns is no longer an adequate
way to aggregate an audience as that content can be found
elsewhere. ZMC identified this trend a few years ago and has
been actively investing behind it. One example is 9 Story,
a leading producer and distributor of children’s animated
content. Children’s and family programming is the most
consistent driver of subscriber acquisition and retention
for digital video subscription services. Another example
was our investment in Cast & Crew, the premier provider of
technology-enabled payroll processing and related services
to the entertainment content production industry.
“WE HAVE OBSERVED
AN INCREDIBLE RISE
IN NICHE PLAYERS
AUDIENCES WHO ARE
WILLING TO PAY FOR
CONTENT THAT IS
IMPORTANT TO THEM”
A QUALIFIED OPINION