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0 pointsmaxerickson12y ago0 comments

What do you want to call Hollywood? Disney has revenues of $19 billion on TV and $13 billion on their parks, while they only make about $6 billion on movies. The movies have a profit of $722 million, TV $6.6 billion.

I guess I wouldn't be terribly surprised if Disney were making more money from ESPN than from producing movies (I didn't look real hard if they break out their various cable property revenues and such).

Perhaps that only weakens your point, but it seems like Google is maybe a better business than making movies.

(This comment expanded after I finished writing it, I had accidentally clicked submit...)

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Alexx12y ago

Yeah, that's what I meant by the total hollywood economic value. Google makes money from multiple services and products too, and in the context of new companies coming in and taking a slice of the pie it makes sense to look at hollywood as a whole. Content (TV, Movies, whatever) and Merchandise (Parks, toys etc) got hand in hand. You can buy angry birds plush toys because once any company establishes a brand they are going to find multiple avenues to exploit it, and any companies coming into the market will be in that position too.

Edit: And you're right Google is a 'better business' than making movies most likely. But that doesn't mean it's not of interest to VC. After all, oil is clearly a 'better business' than Google!

maxericksonOP12y ago

I disagree that oil is a better business than Google. Each dollar of gross profit for a company like Exxon requires a lot more operations than each dollar of gross profit for a company like Google (It's something like 50% more now, even after Google has captured a significant majority of online advertising and begun dithering around looking for more businesses to get into). Microsoft's licensing power gives it a nearly silly position in this comparison (but that has long since ceased to be a major growth industry, disappointing investors).

Energy certainly provides an opportunity to establish a huge operation and make huge profits, but it also requires a huge amount of capital.

Alexx12y ago

Tech has a higher profit margin, but is a smaller industry. So depends which metric you want to use to define better- Efficiency or total profit. Comparatively the largest pure tech (none hardware) company Google is valued at $290bn publicly, and the Financial Times estimates the largest pure oil company Saudi Aramco privately at $2000-$7000bn based on the size of it's reserves.

It's a fruitless argument either way. I simply meant the fact industries with larger figures exist, doesn't mean VCs just look at the random top-line numbers and ignore an industry because it's 'not big enough' when you're dealing with billions of dollars.

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0 pointsmaxerickson12y ago0 comments

Perhaps that only weakens your point, but it seems like Google is maybe a better business than making movies.

(This comment expanded after I finished writing it, I had accidentally clicked submit...)

0 comments

Alexx12y ago

Edit: And you're right Google is a 'better business' than making movies most likely. But that doesn't mean it's not of interest to VC. After all, oil is clearly a 'better business' than Google!

maxericksonOP12y ago

Energy certainly provides an opportunity to establish a huge operation and make huge profits, but it also requires a huge amount of capital.

Alexx12y ago

j / k navigate · click thread line to collapse