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Build Me Up From Bones

The Demise of the Traditional TV Business

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Build Me Up From Bones

OOH …Here’s One Thing  

by Jim Johnsen

 

 

 

I was doing some research this weekend for an upcoming presentation, and I stumbled on an old article from Forbes Magazine, setting the record right on how the “Think Different” campaign came about just when Steve Jobs was stepping back in to rescue Apple.  Its a great read.  More than anything, it made me say to myself, “God I love being in the advertising business…even if I am tangential to the main event.”   You can find the article here⇒ Real Story Behind Apples Think Different Campaign

My favorite quote from the article:  “Jobs initially called the script “shit.”
Do I have your interest yet?

On more sobering news (thank God, for them, not for us 🙂 ), Barron’s again, did an expose this weekend (Barron’s October 21, 2019) on the demise of the traditional TV business and what to expect over the next couple years.  To give you a sense of that article without forcing you to read the whole thing, here are a few key takeaways:

“Its fitting that internet television services are called “over the top”. That can mean excessive, too, and viewers will soon face a bewildering sprawl of choices.”

“We’re [Disney] creating a product that serves the consumer the way they want to be served, which is the best thing a company can do,” he [Bob Iger] says”  ‘Wow. Wow.’  Bob, as Owen Wilson says to Will Ferrell says in the Wedding Crashers, you are an innovator.

“There is good money to be made in media stocks in the coming years, not just despite the turmoil, but because of it.”

“Maloney likes Discovery (DISCA), which owns the Food Network and HGTV and whose stock trades below eight times earnings.”   Yes you read that right folks.  8x earnings.  (not 8x EBITDA).  Not sure the outdoor business has ever seen eight times earnings!  Not exactly great to be in the cable ecosystem right now.  

“He likes Netflix and Trade Desk (TTD), which allows ad buyers to shop across a mosaic of digital TV services [I think he meant to say programmatic btw].  The Company is fast growing and trades at more than 50 times next year’s estimated earnings.”  Okay, so while cable content and distribution get pummeled, Ad tech has its bright spots.    

“Matt Strauss, the new head of Peacock [Comcast’s OTT play], says his vision for the future of television is a screen that is always on.  “The TV is the biggest display in the home” he says.  “In the past, its where you watched video, but in the future, it will be for monitoring cameras, controlling the thermostat, and more.””  If that’s right, Samsung look out!

“Barclay’s Venkateshwar, who sees rebundling as the future of TV, views Netflix as likely to become the equivalent of an anchor network.”  

“Netflix, which has gone through more than $5 billion in the past 3 years, is expected to consume another $7 billion over this year and the following two, before generating positive free-cash flow in 2022”  

and…

“The Company [Disney] says the service [OTT] will break even in about five years.”  Holy Shit Batman.  That is a heck of a hole to dig to figure out whether there is oil down there.  Anyone else remember the cable companies spending like drunken sailors as they moved from 24 to 48 to 96 channels? 

“Alphabet’s [Google] skinny bundle, YouTube TV, is mildly interesting for investors, but its original YouTube video-sharing service is an endless gold mine.”  While it looks like Google is sitting back…as they say, the Pioneers get shot and the Frontiersmen clean up.    

 

Well, okay then.  Enough fun with that. 

What did I listen to this week?  My nephew attended a concert recently and brought me back a signed CD entitled “Build Me Up From Bones”. (When is the last time you saw a CD?)  Five minutes in, I was completely mesmerized by her sound.  While she is defined as folk, I would categorize her as a unique blend of Nora Jones and Joan Baez.  If you are looking for some good driving music she is just the ticket.  I suspect we will be hearing a lot more from this 28 year old tour de force in the future.  Here is one review of the album:

“Build Me Up From Bones is an organic masterwork for Jarosz, a warm, nuanced collection that wraps and enchants the listener. If you’re curious what brilliant natural talent paired with an ongoing commitment to learn and grow can produce, Sarah Jarosz’s latest is a perfect example.” – Stereo Subversion[3]

Wishing you all a good week.  Cheers.  

jfco.com

Securities transacted through StillPoint Capital Member firm FINRA/SiPC

 

 

 

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