Music, movies and entertainment are great trend spotters for new investments.
Over recent years, the internet has seen significant fortunes built and lost, the walled gardens approach that so many companies have protected for so long are unravelling rapidly due to the internet.
Many ‘new media’ businesses have come and gone and the companies that have found their niche have prospered.
By way of example, realestate.com.au now has a market capitalisation of $790 million; Seek, $1.7 billion and Wotif, $1.05 billion. Some years ago these companies didn’t even exist.
In contrast, the market capitalisation of Fairfax is now $3.5 billion, their current share price is around $1.50, which is down from $4.50 in March 2007.
The question investors need to ask themselves is how old media businesses will be able to remain relevant and reinvent themselves as so much of their business moves to the web.
How will the Millennial generation access and digest their news and media? And will they pay for what they use?
In his book, New Rules for the New Economy (which, by the way, was published a decade ago), Kevin Kelly wrote that value flows from abundance. Plenitude, not scarcity, governs the network economy. Duplication, replication, and copies run in excess. Whatever can be made, can be made in abundance. This plenitude:
The value of an invention, company, or technology increases exponentially as the number of systems it participates with increases linearly.
The law of plenitude is not about dominance. The self-interest of ordinary business guarantees that every company in the world will strive to get its product or service into every home, or into every store.
Popularity is an ancient goal. But that is not what network plenitude strives for.
The abundance upon which the network economy is built is one of opportunity.
The law of plenitude is most accurately rendered thus: In a network, the more opportunities that are taken, the faster new opportunities arise.
Furthermore, the number of new opportunities increases exponentially as existing opportunities are seized. Networks spew fecundity because by connecting everything to everything, they increase the number of potential relationships, and out of relationships come products, services, and intangibles.
Jerry Bruckheimer is arguably the most successful director producer of this era. His most recent project is a movie called G Force which knocked Harry Potter from the top spot in recent weeks at the box office.
If you want to know the future trends, watch what Jerry Bruckheimer is producing.
His film credits include G Force, Confessions of a Shopaholic, National Treasure, Pirates of the Caribbean, Black Hawk Down, Coyote Ugly, Gone in 60 Seconds, Days of Thunder, Beverley Hills Cop, and Flashdance. All very successful at the box office.
Entertainment is alive and well in America for the world to see at large with this movie. The second week of release did business of $17,058,000 for yet another success for Jerry Bruckheimer Productions and Disney. The ten-day release total of G-Force is a very respectable $66,461,000.
His latest venture is a remake of The Lone Ranger and stars Johnny Depp as Tonto and will be produced in conjunction with Disney. The movie is set to give the 1956 classic a Disney twist in a modern remake. Ted Elliott and Terry Rossio, the screenwriting pair behind the Pirates trilogy, are in final talks to re-team with Bruckheimer and Disney to bring the masked hero to the big screen, according to the Hollywood Reporter.
The Lone Ranger started off as a radio show in the 1930s and spurned numerous TV spin-offs and movies, including the 1956 film starring Clayton Moore. The story follows the adventures of the Ranger, his white stallion Silver and his American Indian sidekick Tonto, as they attempt to bring local criminals to justice.
You never know, this economy may just be headed back to the future.
Important information:This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.
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