Published: October 23, 2015
Discovery is a niche content producer with a focus on non-fiction programming that is popular across cultures and countries. Its business model is unique in that it allows Discovery to leverage content produced for a given market on a global scale. Additionally, unlike many other media companies ...
Published: August 20, 2015
We think the current situation is an incredible opportunity from a risk/reward standpoint. Gaiam is a well-established, widely known brand that has just launched a new product line to greatly broaden its appeal <em>and</em> an incredibly high growth, recurring revenue streaming content business a...
Published: May 22, 2015
Overvalued, levered cable operator on an acquisition spree with no strategic focus in an industry with multiple headwinds. Street is giving management too much credit due to consolidation.
We don’t remember many newspaper executives in the mid‐‘90s insisting their businesses were about to crater. We suspect that several hundred years ago, scribes thought the demand for handwritten books would continue to last indefinitely and that the whole printing press thing wasn’t really a thre...
Published: April 07, 2014
These rapidly increasing costs are primarily due to the licensing fees required to maintain Netflix's expansive streaming content library. Netflix is in constant content-bidding wars with a number of other big name companies such as Amazon (AMZN), Apple (AAPL), Google (GOOG), and Outerwall (OUTR)...
Published: February 07, 2014
With established brands that enjoy strong consumer recognition, Discovery's channels have become "go to" venues for nonfiction content. The company has kept fully distributed channels such as Discovery Channel and TLC fresh by continuously investing in new programming and updating existing conten...
Published: January 02, 2014
DirecTV's current valuation at 6.5x EV/EBITDA and 10x forward P/E is too pessimistic considering the potential of a US Cable M&A/consolidation trend, DTV's core advantages, aggressive buybacks and continued growth in Latin America/US. There is also a valuation gap to US cable peers which I think ...
Published: August 08, 2013
As a shareholder of Outerwall, Inc. (Nasdaq: OUTR) (the "Company"), we are very concerned about the Company's current direction. While the Company has seen EBITDA from its Redbox unit grow from roughly $50 mm in 2008 to over $400 mm expected in 2013, the Company's market capitalization has yet to...
Published: February 01, 2013
Let’s start with the base retail business. It reminds me of an old Saturday Night Live skit where a banker explains that his business plan is making change. ‘we’ll give you 5 nickels for your quarter. We can even give you ten pennies for your dime…How do we make money? Simple: Volume!’ Do you rem...
Published: January 24, 2013
Given the major headline risk that everyone is focused on, I really believe that the chances are high for some good unexpected surprises: a couple of new hit shows, a new streaming deal or partnership that will significantly accrue down to bottom line, or perhaps an acquisition offer.
Published: December 18, 2012
The dramatic and accelerating evolution of technology is, however, quickly turning the prospects of investing in a historically great business into something more akin to sleeping on top of a ticking time bomb. You don’t know when it’s going to go off, but sooner or later, it will. Owners of thes...
Published: December 13, 2012
We estimated that this current year (FYE June 2013) net additions will be approximately 50k and will turn negative from next year. There are 2 main reasons for this. First of all, we think the UK DTH market is very mature and near saturation. The second, and more important, reason is that competi...
Published: September 28, 2012
No industrial logic supports the continuation of CRWN as an independent company (or, technically, an affiliate of Hallmark Cards, Inc.). A sale of the Company to a larger cable programmer would result in immediate and significant cost savings as well as future revenue enhancements, value that sho...
Published: August 16, 2012
What makes DreamWorks unique is its ability to increase its earnings power by leveraging its growing library. Every year that passes will mean that DreamWorks’ library of content will grow by 2-3 movies. And every year that passes will mean the margins generated from that revenue will increase as...
Published: June 19, 2012
CBS has yet to license content for current running shows on CBS or Showtime (i.e., its most valuable content!). Translation: they are signing $100mm+ deals for content that is 20, 30, 40 years old in some cases. The stuff that is really valuable is the current show lineup, which could produce a t...