Profiled: Desilva and Phillips
www.mediabankers.com
Managing Partners: Roland A. DeSilva, Reed Phillips III
Number of Employees: 17
Founded: 1996
Many of today's publishing companies recognize the value in being able to take the content they produce and put it to work across multiple platforms, thereby extending their reach and increasing their bottom line. No longer will a magazine stay just a magazine, but it can also become a well-trafficked Web site and a dynamic television show. The ability to put valuable content to work in different places is keeping DeSilva & Phillips, a New York investment banking firm, busy helping clients manage the art of the deal. Founded in 1996 by managing partners Roland DeSilva and Reed Phillips III, the company specializes in mergers and acquisitions for media companies, with successful transactions totaling almost $2 billion dollars. The executive staff consists of ex-management from media companies, such as Capital Cities/ABC, CBS, CNN, McGraw-Hill, The New York Times, and Time Inc."We're big believers in the idea that when content is created, it can be used across many platforms," says Daniel Ambrose, a managing director for the company. "Buyers and sellers expect to take content that exists in one form for one medium, such as TV or magazines, and utilize it in another, such as the Internet or a conference." Ambrose has worked in the publishing arena for more than 20 years, including traditional print venues and new media. His role at DeSilva & Phillips is to serve clients in an advisory capacity, using his expertise to help them to grow their businesses. This includes assisting them to make informed choices about purchasing companies that will benefit their existing businesses, or selling those entities that may be less valuable, and in turn putting those assets to better use. The right combination of companies has the potential to create a powerful synergy that will help content sell.
Turning A Profit On The Web
The arena that sparks continuous debates over how to turn a profit with content involves the Internet. With millions of sites vying for the attention of Web surfers, many business models have ended up becoming nothing more than costly experiments. These dot com bombs didn't consider that they would be required to generate a huge amount of compelling content combined with effective marketing strategies in order to remain solvent and develop a loyal user base. However, even these elements were not enough for some to stay afloat. "Companies that are successfully creating content just for the Internet are very few and far between," Ambrose says. "The successful business models are creating content that they are leveraging across multiple platforms." It is not surprising that those established media companies, such as The Wall Street Journal and The New York Times, have built successful online venues. They work because they have strong brand names, combined with existing content streams that they bring to the Web.
The Future of Online Content
The "stickiness factor"—those often elusive features that businesses employ in order to attract and retain consumers—is not as simple as it once appeared to be. "If someone has seen your exciting content once, does that mean they're going to come back when the whole Internet beckons every time they come online?" Ambrose asks. "That content doesn't really give you very strong loyalty." The problem, he explains, is that using the Internet simply as a publishing platform is not making the best use of what draws so many to it in the first place. Everyone from pre-teens to grandmas understands a concept that many in the online industry have failed to grasp—the Internet is interactive. People use the Web to email friends, frequent online chat rooms, post to forums, and search for information from experts or those individuals who share similar interests. They attempt to seek out other voices, and relationships, not just the written word. "One of the areas where content companies have been strong are the ones that have focused on community content," he says. Ambrose believes companies that are community-based will have a greater chance of survival. "The bottom line is that their cost structure for creating content is so much lower than others that they will probably be winners," he says. "The other kind of winners are those companies like The Wall Street Journal who have an existing content stream so they don't have to charge much for it on the Internet."While many established media companies up until now have hesitated to compete against start-ups within the online arena, they are now beginning to see the wisdom in doing so and are putting content on the Web. Meanwhile, technology continues to evolve, and Internet access in the not too distant future will be almost instantaneous. As people grow more used to connecting wirelessly throughout their day, Ambrose looks forward to seeing which online content will emerge as the most valuable and sought-after. "There will be some unique types of content for Internet consumption that won't be distributed to other places," he says. "But a lot of it, particularly things that are textual, can be distributed in multiple platforms quite easily."
Finding What Works
"Within the company, we're all pretty bullish on the Internet and the long term advantages it will have for media," says the company's co-managing director Reed Phillips. "However, currently in the short term, things appear somewhat murky." With the advertising downturn affecting media, many companies are cutting back substantially on Internet investments. "In most cases, whatever they (individual companies) are doing on the Internet is, at this point, an investment, rather than a profitable business." Because so few companies are really making money with online venues, the Web becomes, as Phillips explains, a relatively easy target for expense cuts. "In general, people are still struggling to find the right formula for what will work online," Phillips says. "And most media companies are coming to the conclusion that the ad-driven model is not working for them, and won't work in the near-term. Therefore, they have to look for other ways to get paid for their content."
Phillips, like Ambrose, acknowledges that the Web is evolving, and people are still experimenting. "There are some advertisers who are willing to spend money against the current marketplace and companies are trying to figure out how to help them deliver their message by trying different things," he says. Although a lot of media companies are cutting costs to weather the storms of the economy and advertising downturns, many, Phillips explains, are thinking expansively and looking for opportunities to buy. The Internet, therefore, continues to be an attractive, though developing, medium for content distribution.