Portfolio manager Dan Green analyses how shifting trends in content consumption are boosting businesses that create innovative content and own strong intellectual property (IP).
Key takeaways:
- The rise of influencers and content creators has led to a seismic shift in brand and advertiser behaviour
- Owning the intellectual property (IP) of strong book franchises can ensure repeat business through TV and film series adaptations
- Advertisers are increasingly partnering with digital media firms to better engage with more diverse demographics
Digital infrastructure is shifting content consumption
Speed of access to information through digital infrastructure has resulted in content being increasingly important in our economic and social activities. Indeed, it feels difficult to walk down the street these days without being bumped into by someone staring at their mobile phone, transfixed by a screen.
The way that we access news and content has evolved significantly over the last two decades. Once considered the principal medium for accessing facts, opinions and analysis, newspapers have been subjected to a shift in consumer habits, culminating in a dramatic reduction in readers. With their declining numbers of customers, advertising spend has shifted to other mediums.
The growth of influencers and content creators
In 2007, news media advertising – magazines and newspapers combined – was worth £7.1 billion in the UK, or 39 per cent of the £17 billion total UK advertising spend. In 2022, all national, regional and magazine titles combined made around £2 billion in advertising revenues (print and online) out of the total £35 billion UK advertising spend.
This was less than a fifth of what they received in 2007. They’ve gone from taking 39 per cent to a 6 per cent share of the total1.
Brands are needing to adapt to changing media consumption habits like the rise of content creators and influencers. According to Influencer Marketing Hub, the influencer marketing industry is expected to grow to over £17 billion in 2023, with TikTok being the most popular influencer channel2.
With the rise in influencers and vloggers it is estimated there are now over 40 million people globally that regularly create content for social media platforms and look to monetise that content3. To compete in this environment, content producers are increasing their spend on advanced recording equipment to create and monetise unique content.
Media companies around the world are also spending more on content as they look to compete for subscribers. Ten years ago, Netflix spent US$3 billion on content, this year it will spend US$17 billion4. With competition from Disney+, Amazon Prime, Apple TV, Hulu, Peacock, HBO Max etc., the total amount being spent on content is increasing each year and media companies are looking to bring popular intellectual property to the screen.
For instance, despite Harry Potter being first published over 20 years ago, HBO Max and Discovery+ have announced that a decade-long series is being produced diving deep into the stories from the original books.
Below we highlight some portfolio companies, which are benefitting from this shift in media consumption.
Enduring IP
Bloomsbury Publishing is home to very strong IP. These include the publishing rights to Harry Potter, which still features in the top ten sellers of children books, and bestselling ‘romantasy’ author, Sarah J. Maas.
Bloomsbury has published 16 of Maas’s novels since 2012 and has six more under contract. Sales grew by 51% in the last financial year and hashtag views on TikTok relating to her name stand at over 11.5 billion5.
