Global Media Comparisons-Platform evolution places premium on content: Macquarie

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Global Media Comparisons
Platform evolution places premium on
content; new draws for advertising

Theme of the week: Content ownership drives viewership
and advertising

 Macquarie launched coverage of three US internet stocks recently:
Google, Yahoo and AOL. A key theme in these reports is the importance of
these web properties building and maintaining viewership through content and
services. The definition of content has shifted to include user-generated content,
video and games. Critically for all parties involved, proliferation of devices (such
as iPads) and convergence of platforms (such as Google TV) bring about
broader distribution and shifts the value of content to the content owners.

 Online content for Google, Yahoo and AOL is important, particularly given
the rise of competitors such as Facebook and Apple, which have successfully
established closed systems that place walls around content. Clearly Google
has interests in building out platforms such as Android-driven mobile devices
and GoogleTV to protect and extend its core search business, but also to
expand beyond it to other ad-driven media. Within Macquarie’s global media
coverage Google, Yahoo Japan and Sina are key internet stocks to play
on the theme of monetizing content off their strong user base.
 TV networks own prized premium content that can be syndicated, and these
companies are all trying to navigate through the transition to a digital age.
While there certainly are threats from viewership of alternative content on
emerging platforms, we believe TV networks’ destiny is in their hands:
ultimately, media companies that own more of their own content are better
positioned than those that do not. CBS, Time Warner, Disney, Viacom and
BSKyB stand out as vibrant TV content producers unlikely to be
disintermediated by rising technologies. NewsCorp and Comcast are both in
transition stages (for different reasons), but could both evolve successfully.
 Newspaper and magazine publishers are grasping at a potential lifeline as
mobile devices like smartphones and tablets multiply. These publishers are
keen to sell subscriptions via apps and expand and define their user base to
attract more advertising, at better rates.
 Advertising & marketing services companies should also be beneficiaries
of this progression, as new ad formats emerge that can attract marketing
spending to popular and more advertising-effective platforms.
Our views on key news (see p. 7)

Three stories of note on this topic this week:
 YouTube is launching a skippable ad service
 Fox TV is now offering make-goods for ad inventory on video site Hulu
 iPad-only publications are on the way