Investment gurus have taught and continue to teach metrics that can help identify the right investments. Over time, a full list of some of these metrics has been sent to new insider investors; a list that includes hedging against inflation, yield and returns, level of risk, liquidity, tax concealment, etc.
Yield and returns
For an example of the return and return potential, according to Wikipedia, the production budget for the movie Living in Bondage II was 10,000,000 NGN while the gross box office revenue alone was 168,000,000 NGN. This represents a 1600% (approx) ROI of a monetization channel and surely there are other channels out there and that is why more than ever content in all its forms is very valuable – due to the different opportunities. of monetization.
Hedge against inflation
There is certainly inflation protection as it would still cost the same amount to pay for production services (no one received a salary increase due to rising inflation) and therefore it is very unlikely that the sale price changes. To fully understand this point, notice how inflation hasn’t affected the cost of streaming subscriptions on your favorite OTT app.
How is it that Nigerian investors of all levels then largely overlooked content as a viable investment vehicle? RISK – it surely occurs to me!
Rethinking approaches to investing in content
Yes, we can say that there have been huge investments in content in the past which have not given way. This argument would not be entirely false, but it should be noted that in most of these cases the actual investment would usually be in an organization or platform, as was the case when Verod Capital invested in Spinlet.
Needless to say, we need to rethink the approach, making the content itself the main instrument in which we invest. I mean, you wouldn’t have to buy a manufacturer to invest in transportation. Why then do we think that to approach investment in Content, you have to buy the platform or the company, even sign the artist, etc. ?
Since content is an intangible good / commodity, we tend to approach decisions about it from a sentimental point of view whereas
Data and analytics should be at the heart of every decision about investing in content. Ideally, the services of an analyst would be required. The ideal analyst will be someone with a good understanding and appreciation of content, combined with strong analytical skills.
They can then help identify content opportunities that may represent a viable investment.
Another factor that needs to be taken into account is the structuring of the deal. Understanding the distribution / monetization possibilities around the content under consideration will also allow investors to make better decisions.
There are several ways to structure investments, including joint ventures with the content creator where Investors’ Capital engages in marketing while the creator provides content that meets standards set by investors; The outright investment in content production is also possible. Etc.
In these cases, the services of a marketing agency as well as an intellectual property / copyright lawyer should be engaged to identify the best approach to structure the case.
This flexible approach to investing in content will also allow budget Control and oversight because the mandate is limited, at least as far as the expenditure phase is concerned.
One investment that would be worth considering from this perspective would be Kupanda Capital’s recent investment in Mavin Global. While it’s early enough to call, there has been 1 commercially successful project – Rema, and a host of other fringe projects.
Mavin’s marketing abilities, however, put them in a better position to be successful – a factor that must certainly have been taken into account when making the investment as the PR announcing the investment contained details such as the total number of Youtube video views. , the number of subscribers, etc.
Written by Damilola Layode