Content Is King Again, Just Look Where The Megabucks Are Going

Is content king again?

Over the past few years, you had to wonder because, let's face it, it seemed to be the distributors who were making all the impact. Even if the latest name in the game had content to offer, this was nearly always made available through a deal with a content creator. Working in a highly fragmented industry, competing owners could never quite get their act together to get a decent deal for themselves and the artists and actors who made the content in the first place.

So we've had the likes of Spotify (and a dozen other music streaming services), Netflix (and another dozen VOD operators) and the service which epitomises the recent power of distribution over content ownership, Google's YouTube.

However, the last year or so, we've seen change. Not only has Netflix arguably made all its recent impact through ownership of House of Cards, but Yahoo is also starting to create its own TV content. 

Then, there's Spotify having to accept it needs to throw the big labels some shares to keep them onside as well as YouTube backing down on a draconian dictat that anyone not signing its new terms of use - ie plucky independent labels - would be thrown off the service. They didn't sign but they're still there. YouTube blinked first.

That's what makes this week's revelations about who's trying to buy whom so fascinating. 

Murdoch is after Time Warner but his $80 billion offer from 21st Century Fox has been turned down. Why, you might ask? Well, I don't just think it's because Time Warner doesn't want to sell, it probably realises that Murdoch has set off a chain reaction where they are sitting very pretty.

At the same time, Murdoch wants Sky to get fully control of Sky Italia and Sky Deutschland to create a super pay TV satellite operator with one set of systems and content rights. So, Sky sells its near six and a half per cent to Liberty Media with, one can imagine, more than just half an eye on using the GBP480m to achieve its continental European ambition of aligning the UK with Italy and Germany. 

Liberty Media. The name speaks volumes, John Malone, the cable guy, already has Virgin Media but he would appear to be interested in content and not just media. He doesn't just want to pump "Downtown Abbey" down his wires, he wants the keys to the estate.

For someone who always believed that content really is king - after all, what are those distributor networks going to show if they don't have compelling content - this is pretty gratifying.

If you'll pardon the Netflix pun, Murdoch truly has poked a finger in to a "House of Cards." Quite how they will land as they tumble is the most intriguing question.

Here's my best bet. The guys renowned for distributing content or allowing people to create their own content on their site, they're likely to want to get a means of securing top notch content not just in the future but also the past, you can instantly see the allure of owning blockbusters such as the Harry Potter films.

So, Time Warner - who've been here before remember - are absolutely right and their wording is very interesting. It talked about not being the best time to sell and that time would give shareholders more value. 

For that read, we're expecting a call from Facebook or Google any time now and we thank you very much for ensuring they don't even start a conversation if they've not got quite a bit more than the $80 billion we've just turned down.

After years of people making billions out of pipes, we're back to talking about people actually want to do through those connections.

Content truly is, once again, king.
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