Just when you thought IP/patent libraries and protection only covered technology - with allusions to Nathan Myhrvold’s Intellectual Ventures and its patent aggregating history - Haim Saban’s capital group has jumped into the brand valuation business, and it’s a rather ingenious play.

With enough capital to carve out real brands and bring them to life via transmedia (i.e., across all media), Saban is creating value separate from the media/technology base that most look at for in IP.

His recent “Power Rangers” buy-back from Disney allows his team to reinvigorate brands that, in this case, Disney bought from Saban.  

The thrust of new acquisitions has been increasing interest in what many believe is a next wave of tech acquisitions - primarily around cloud computing and mobile, some might argue - yet as this trends, it promotes another wave of utility offerings.

With FourSquare walking away from Yahoo (or the converse), Zynga walking away from Facebook and other start-ups looking at sales instead of IPOs, it appears a good time to look at the big tech players and see where there is complementary utility or opportunity.

I.e., if Cisco can go after ad-based social networks (Eos) and flash video devices (Flip cams) and HP can go after mobile handsets (Palm), what does this portend for other big tech players looking to diversify their tech offerings?

Per GigaOm: Technology companies over the last few years cut costs to the point that they now have cash surpluses — which they haven’t been shy about spending to acquire venture-backed startups. The Wall Street Journal has picked up on this trend with a story this morning that cites data from Venture Source showing that 15 startups were acquired in the last week alone, and another 14 have gone public in the last year.

If the era of select IPOs - with musings on Facebook, Demand Media, Groupon or Zynga - creates volition for a round of quick M&A sales, all the better for the industry. As we’ll report, venture capitalists (like big tech co’s) are feeling the heat of not making investments in new companies over the past two years.

Now that LPs are putting pressure on VCs to show some ROI, it will be interesting to watch the force of M&A that feeds the “vicious capital” cycle.

Venture Capitalists and their LPs will push for a lot of M&A sales which will ultimately feed the bigger tech companies need for snap/strap-on investments and company growth. Consolidation, M&A and diversification will service all parties.  

It’s an interesting chapter for traditional media these days, where the advent of iPads (assume, if you will, that they will be “broken” or hacked to allow unlicensed or un-proprietary content), Boxees, Hulus and Netflix Streaming continually tests the ability of mainstream media to expand its price and library footprint.

Whether it be buying a big library like MGM (post-Sony/Comcast) or Miramax (post-Disney), the real value studios or private equity see in these sizable libraries is the money they will throw off in terms of license deals. Basically, 7-year “ultimates” - i.e., revenues from the many license windows of distribution.

That this money is now pointing more to more at the lower revshares of the iTunes/iPads/Apple TVs, YouTubes and Hulus reduces the overall payloads and valuations considerably.

It’s almost like adjusting for “technological” inflation. Will the studios adjust?

Questions have to be asked: Can the studios keep their accretive acquisitions and productions at the rates they are by adding staff to their digital distribution divisions? Will digital growth eventually narrow media losses, vis-a-vis by distributing content more intelligently in the primary traditional windows, followed by smarter delivery to digital windows?  

Is super-sizing your funds a way to create venture runway to steer past or through the downturn and stay competitive in the global market? Many startups - like Mahalo, Ning and LinkedIn - pride themselves on raising enough funding to survive the nuclear winter of late 2008 and basically all of 2009. Facebook decided to add runway and incent its employees through a follow-on $100 million passive investment from DST, Russia’s Digital Sky Technologies group, who also put $180 million into Zynga in December.

Last Tuesday, Intel Capital and 24 VC firms set to put $3.5 billion over two years into US startups to bump up America’s competitive edge. Intel Capital is earmarking $200 million individually.

Via the NYT: in a program called the Invest in America Alliance, Cisco, Intel, Google and Microsoft, among other big tech employers, are hiring 10,500 US college tech grads to regain international ground lost. Per Intel’s Paul Otellini:

Unfortunately, long-term investments in education, research, digital technology and human capital have been steadily declining in the U.S. So, too, has the commitment to policies that made us such an entrepreneurial powerhouse for more than a century.

As many VCs raise more to create investment mines in nascent countries such as India and China, the market seems to be correcting in trending tides: first startups who squirreled away cash, Angel capital/investment groups who are finding High Wealth Individuals (HWIs) looking for early discounts, tech companies seeing their international talent and US competitive edges decreasing, and now VCs who see value in creating big funds.  

They called it the “Battle Royale” of media and entertainment. This year’s CES pitted Internet video upstarts like Hulu, Roku, and Boxee in a cage match against industry stalwarts such as Comcast and Time Warner. At stake: the hearts and minds of millions.

It was spun as a victor-versus-vanquished battle. It was either going to be Internet video’s David hoisting aloft the head of the Goliath that is cable TV, or cable mowing down Hulu and the others like so much other Internet roadkill.

At first glance, it appears that David is a stone’s throw from victory. The ever-crucial 18- to 24-year-old viewer, who spends $11 billion a year on entertainment, no longer watches TV as we know it. They are Cable’s Lost Generation. However, it turns out that they may not be as lost as we think.  

A lot of what we see on the Internet is digital publication; usually we can print it out. This notion underlies my grand unified theory of Internet video: treat it like publishing, not film or television, and this will become a viable industry.

Much of the film and television business is based on risk management. Will this show work? Maybe! So why make it? Because it’s based on this book that sold a million copies and it stars Brad Pitt and it’s a murder mystery and we know that murder mysteries are SO HOT right now, especially with teen girls in suburban neighborhoods. Every brand, talent and genre has a particular following, and we have a vague sense of how big that following is and who is in it. And the marketing people in Hollywood, they’re brilliant. They know exactly how to reach these audience pools and how much money to spend doing so. All things considered, if there’s a pretty good shot people will watch a show, and the projected audience is big enough to justify the cost, the project’s a go.  

If the social or virtual goods market is exploding, expect it to also affect content online. Find a way to commoditize virtual content. So forget the Zygna virtual goodsvilles for a second, and start seeing 2010 as the  year of ubiquitous “content farming” - where all of the serious digital publishers start long-term planning. Writers and journalists will be told by their editors to create articles that - unless tabloid topical in nature - hold future or lifetime value. I.e., articles that stand the test of time, they don’t rest after a week, but gain continued readings  culminating in a heady 50,000 and up read count. Writers will be paid on ultimates: initial viewings, repeat viewings, sharing via social outlets,

The value of these lifetime posts? Well, to a Demand Media/Studios, AOL, Mahalo or similar, it’s a matter of quality (and quantity), think of it as quality based on what people are organically searching on Google, and quantity in terms of creating enough of a base of content that the YouTube’s of the world treat you as regulars. As YouTube’s video search is becoming a natural extension of text search, the ability to create posts in text and video is rapidly changing the landscape of content consumption. Users will start with the 10-step best of written articles, then graduate to video tutorials leading eventually to the user referring the post to others, include religious comment reading and the potential original user comment.

Sites like Huffington Post, the Gawker Network and other blog networks (blog nets) have been built on aggregated editorials - e.g., taking original posts from other relatively well funded or traditional media outlets and adding a little personal spin. That approach, while it’s worked out to a recent $300M valuation for Gawker’s templated Movable Type-hacked sites, may be changing as advertisers and publishers start jumping on the long tailed horse.  

2009 provided the best non-documentary film of the year in “The Hurt Locker” - it seems timely to take a few heroic stabs at predicting where media will be in the new year. Before 2009 times out in Los Angeles, a breakout of Media & Entertainment possibilities:

1. DVD - “Hurt Locker” is an apt metaphor for the film studios’ DVD departments, who had a substantial off-year, given the rise of online video distribution, gaming, rival HD dvd players and an economy that rewards a cheap theatrical ticket versus waiting for the long tail/queue of home video. Where they go next: Expect more depletion as consumers realize more and more that they really “can wait” for films to open in cheaper and more on-demand windows. Good Ron Grover/Business Week article on Netflix v. The Big Studios with colleague Ted Sarandos.
2. Consolidation - with Comcast finally getting its content networks in NBC/Universal, expect other big communication fish, who want to play in cable, to step up acquisition efforts, especially as traditional media joint ventures like Fox/NBC’s Hulu are growing stronger in online video. Hulu’s growth disrupts the tech hierarchy, so expect Microsoft and potentially Verizon to make a play that strengthens their content platforms while also giving them access to revenue-bearing cable networks. Where they go next: Verizon is definitely in talks around Viacom (who also should buy(back) Summit Entertainment fwiw), which would put AT&T in play - and anti-trust play for that matter - with potentially Viacom or some form of JV with Sony; or rolling up the mini-majors, Microsoft doubles down on its XBox audience with a Fox (a stretch) or Lionsgate (a good fit) acquisition. And yes, Microsoft and the others have shown little interest in owning content versus distribution, but with Google tied into Vevo + YouTube, and Comcast with NBC/Uni, it starts to make sense to own a production/distribution media co entity as a block or future trade in the ongoing consortium wars. Expect Discovery Channels and Fox to continue to buy while things are relatively cheap, with Liberty Media involved for guidance, and Peter Chernin potentially overseeing NBC/Uni or any one of the other consolidations.
3. Hollywood Talent - As written up in the past on “starpower brown-out,” entertainment and most media is moving away from the individual artist scenario and into the filmmaker stage. From the $500 production of “Panic Attack” which became a $30M film greenlight to the Stephenie Meyer “Twilight” Summit saga to Paramount’s “Paranormal Activity” grosses and “Star Trek,” Sony’s “District 9,” etc. - everyone is looking for the next big thing before it hits, but on the storytelling side instead of the usual talent/talking head side. If Tiger Woods is any example with his sponsor withdrawals, brands and big studios, will be looking for genuine or authentic (or ensemble) films that tell a good story well. Where they go next: They go to the agencies and structure  some form of bargaining position with less upfront and pay-or-play deals, including more backend equity and merchandising rights. Talent - including the J.J. Abrams and Tim Kring of “Heroes” - also begin creating more original IP that they can sell independently of their studio overhead deals. More Mel Gibsons, fewer Eddie Murphys - if that makes sense - going forward.
4. Personalized Content withinTechnology - With Apple’s highly expected iGuide or iTablet, Google Nexus One Phones and faster/stronger/better Wii’s, XBoxes and PS3/4s, consumers will find themselves spending more than 40% of their time online when not at work. The FiOS or U-Verse will offer more content than ever available, which will change consumer behavior - they simply will not have time for 5 much less 500 channels, and will turn to online to sort, niche and program their viewing around what their like-peers enjoy - think Boxee model here, which Comcast, DirecTV or TiVo buys. Where they go next: With all of these content inputs coming primary out of the tech space, traditional programming and brand advertising will change their models (slowly, although good to see Pepsi pull out of the Superbowl recently) to connect with the interactive or hyperinteractive crowds. To those who still favor a lean-back, couch potato lifestyle, it will still exist, but its metamorphosis will be personalized programming with either lean back or forward approaches.  If you think advertising CPMs/analytics online is a hearty business for Google, look forward to a bigger market when full-form content gets extremely searchable and programmable.
5. Content Windows - fewer theatrical releases and more pressure from all of the things that have been hurting DVD are going to force tighter windows, which will equate to lower initial returns, throwing off first run and second run/home entertainment revenues further. All of these predictions basically integrate together: consolidation, technology and talent reductions will reduce production costs, forcing films and series to perform immediately as content drivers, then be pushed into much less lucrative library pools. Where they go next: Consumers will see films and tv pilots as snapshots, unless like “The Dark Knight,” there are ARG’s supporting long-term audience capture. Content windows will ultimately be less important than content niches, whose niche audiences protect the media they like by buying it in every form available. Think “South Park,” “Family Guy” and the sinkholes of activity between the X-Men films. Hollywood or M&E will finally realize that they should have been actively trying to aggregate their audiences instead of dropping them between films, sequels and DVD windows. The labels’ 360 mentality will become a living/breathing habit for studios who want their brands - i.e., their films, not their corporate names - to have staying power.

That wraps up 2009 for New Medici - to newfound success and innovation in 2010!