Author Archives: Chris Broussard

Beginning all the way back in 1994 with its original investment in The Golf Channel, followed by taking a controlling stake in QVC the following year (which it eventually sold to Liberty Media for a cool $7.4 billion profit), Comcast (CSMCSA) has a history of using its muscle and foresight to secure the fuel that keeps consumers watching — content.

What’s made Comcast one of the darlings of our Content is King investing thematic is that long ago it recognized the power of content to keep customers continuing to fork over the money to pay their ever-increasing monthly cable bills. Of course things kicked into high gear in with its deal with General Electric to create what became NBCUniversal and the TV, movies and music that came with it, as well as Universal Studios theme parks.

Keeping with that pattern, the announcement that Comcast-owned Warner Brothers studios has acquired the commercial TV rights to the Harry Potter franchise — past and future releases — adds a powerful new wand to its lineup. How and where people will be watching the Wizarding world in the emerging chord-cutting world remains to be seen. At the end of the day however, Content is King, and we know that people will always seek out, and even pay for, what keeps them engaged and entertained. No franchise other than Star Wars has proven that more than J.K. Rowling’s Harry Potter.

In a wide-ranging seven-year deal with Time Warner Inc.’s Warner Bros. that takes effect in 2018, the Comcast Corp.-owned media company will obtain commercial television rights to the eight “Harry Potter” movies, which will air mainly on the USA and Syfy channels.NBCUniversal also will get rights to the coming “Fantastic Beasts” franchise from “Harry Potter” author J.K. Rowling, and will be able to use the “Harry Potter” and “Fantastic Beasts” source material at several of its Universal theme parks in conjunction with its hugely popular “Wizarding World of Harry Potter” attraction.

Source: NBCUniversal Places Big Bet on ‘Harry Potter,’ ‘Fantastic Beasts’ – WSJ

Amazon sits right in the cross-hairs of several of our themes: Connected Society (online shopping), Cashstrapped Consumer (cheap online shopping + Prime free shipping) and even Content is King with the Amazon original series. Nothing represents the impact Amazon Prime is having than this story detailing the expansion of the online giants’ fleet of planes used to deliver products throughout the country.

While Amazon’s drone program remains in testing, the e-commerce giant is turning to cargo planes to keep up with package delivery demands.At Seattle’s Seafair’s Air Show on Friday, Amazon will display what could be the first of many Amazon-branded cargo planes dedicated to the firm’s Prime delivery service. The plane, dubbed Amazon One, is a Boeing 767-300 operated by Atlas Air, the airline which provides air cargo services to Amazon.

Source: Amazon launches Prime Air cargo plane fleet | ZDNet

The next super-hero release is typically a must-see event for the staff here at Tematica, and it’s been that way probably since Richard Donner’s Superman hit the screen in 1978. Sure, there were dark periods — most of the 90’s to be specific — and there have been times where they all start to become formulaic. For the most part however, Directors have been able to reimagine these franchises when they get stale, and this is a proof-point for our Content is King thematic — no matter where the delivery channels and devices head, at the end of the day, the consumer craves great content and the superhero genre has been a consistent provider. Great news for Marvel owner Disney ([stock_quote symbol=”DIS”]) and the host of other studios that own the rights to various franchises, including Time Warner ([stock_quote symbol=”TWX”]) owned Warner Brothers and its rights to several DC Comics franchises.

Between Marvel and DC there are some 17,000 characters to choose from—enough for them to keep battling it out for box office dominance for the next 3,400 years.

Source: There Are Enough Superheroes for 3,400 Years of Movies | WIRED

“Everyone’s trying to find a way to maintain market share and also extend themselves in a different way that’s maybe not traditional to retail,” said David LaPierre, a vice chairman with the Global Retail Services Team at CBRE.

Source: What the changing tenant list in Times Square says about retail

A 40,000 square foot NFL store? Foot Locker opening a 36,000 store just for basketball shoes and apparel? a 6,000 square foot Hershey store? In the

Nope, just reacting to the evolving consumer.

Make no mistake about it, these stores will likely make any number-crunching CFO pull what ever remaining hairs they have left out ( we have no data to support that stereotype, but we suspect there are few CFO’s out there that wouldn’t want a better hairline.)

These stores aren’t likely to be big revenue-makers for these companies. Rather, they are what we call the “Experience Economy” and are coming about as a result of two thematics we track at Tematica Research: The Connected Society and Content is King (two of the top performers in our recently release Thematic Index)

The Connected Society, with its always-on broadband networks and connected devices, have transformed many the industry, none more than retailing, led by Amazon (AMZN). Why would anyone go to the mall when you can log into Amazon Prime, find what you want in 2 minutes, have it shipped to you maybe the same day if not max 2 days, pay nothing in shipping and handling, and likely get it cheaper?

When do people go out and shop? When they are bored and want to be entertained, which is why you see the American Mall being transformed into entertainment centers. Movie theaters, restaurants, gaming centers — these are the “stores” dominating the malls these days, providing shopping experiences that are just that, experiences. We would place the Apple Store in that category.

What these retailers are doing to creating “content” — not in the traditional sense of a video, book or article — but creating shopping experiences that extend the brand, and lead consumers to make purchases online.

The NBA was actually a leader in this space, going all the way back to the mid 1990’s when it created the Jam Session experience at it’s All-Star game, the Jam-Van which brought the NBA experience to small towns across America (and even the West lawn of the White House) and the NBA Store on Fifth Avenue.

For a sports league, this strategy made sense. But, now it’s being played out by the likes of Hershey, the most basic of consumer products there is, and many other brands.

When we see multiple thematics converging together — like what’s happening in Times Square — we move to the edge of our seat and take notice.

The Content is King thematic — one of the better performers in our Thematic Index — focuses on how the in today’s over-stimulating world, it’s the content providers that are breaking through the noise and building lasting interactions and engagement with users. Yahoo! (YHOO) would be what we call a negative confirmation of the theme — the once upon a time giant of the internet is quickly fading off into the distance with the prospects of being acquired by the old-school telecom giant Verizon and being folded into AOL. It’s downfall? Well, with it’s search business long-ago surpassed by the Google train, the company has floundered for nearly a decade attempting to provide some sort of engagement with users — in other words, trying to find some content users will use and come back for.

But Yahoo has had to curb those ambitions. It last year wrote off $42 million in expenses for developing three video series, including a revival of the popular “Community” show. In January, Yahoo also shut online-video portal Screen after spending more than $100 million to make its own shows, excluding the cost of the employees involved.

Source: Verizon Nears $5 Billion Deal for Yahoo’s Internet Businesses – WSJ

5x revenue buyout? Is this the Internet Bubble again?

In this case, Unilever’s $1 billion (yes, that’s billion with a “B”!) buyout of the Dollar Shave Club has less to do with its e-commerce chops than what it was able to accomplish with its content — develop a loyal following of men purchasing what basically falls under the Health & Beauty sector.

At the end of the day, it has been Dollar Shave Club’s content creation that has attracted millions of views of its edgy advertisements, and in turn subscribers to its monthly razor blade shipping service. So while many would think we would categorize this story under our Fountain of Youth investing thematic, where we are filing it is under Content is King. Yes, in today’s over-stimulating, multi-platform media world, the businesses that are succeeding are those that are focused on creating quality content, and letting the end user access it when and where they want. That same principle is applying more and more to consumer brands and their products.

Unilever paid about five times the revenue that Dollar Shave Club is expected to bring in this year. Much of that premium stems from the value Unilever placed on the razor seller’s brand and customer-relationship skills, he says. E-commerce startups without such a strong brand should expect buyout offers closer to one to two times their annual revenue, he says.

Source: Why Unilever Really Bought Dollar Shave Club – Bloomberg