This week we sit down with Fabio La Franca, Investment Manager at Creative England. Fabio has a background across finance and M&A deals for media and entertainment companies, plus working with content and publishing startups on fundraising, investment readiness and business strategy. He talks to us about the top trends for the content and publishing industry and how creative startups can use business intelligence to stay ahead of the game. You can follow him on Twitter @lafrancafabio
Chloe: Hi Fabio, thanks for joining us today! Can you give us a brief overview of your background?
Fabio: I came to England to do my MBA at the University of Exeter and joined a Big Four accountancy firm to complete an ACA. I started in audit in financial institutions, mostly Private Equity firms and hedge funds, then moved to corporate finance and M&A deals, working across the media, broadcast and entertainment industry. I also spent some time in New York, working with some great people working within technology and startups. I came back to the UK with my mind set on helping startups and entrepreneurs. I mentored at different accelerators, including Wayra Telefonica where, as a CFO in Residence, I helped and advised on fundraising, investment readiness, financial modelling, strategy and biz dev. I’ve now joined the other side of the table, the “dark side”, to be the investment manager for Creative England. I will manage the existing portfolio and, raise a fund to invest in digital media and entertainment companies.
Chloe: What are some of the key trends for the media and content industry?
Fabio: The major trend for the media, entertainment and publishing landscape has been the continued digitisation of the sector, fragmentation of audiences, changing consumer behaviours, convergence and disintermediation. All of which have led to a landscape of increased connectivity, complexity and growth.
Startups have introduced technologies that are changing the way people create, manage, monetise, distribute, and consume media and entertainment.
When you look at the startups working at the various stages of the content lifecycle – content creation, content management, content commerce, content distribution and consumption -, it’s exciting to see how each is impacting one area in particular. I dare to say “disrupting” even though that is an overhyped word. So the media and entertainment content no longer starts and ends in a studio. Now, content comes from various sources — from a broadcast network to a smartphone.
A great example is Netflix, which is a research data-driven company, so it can distribute and develop content worth watching that resonates with their audience. This data helps Netflix understand their users, so capturing and analysing this data is a primordial step to making informed and intelligent decisions. When advising startup I won’t ask them “What do you think of your content?” but “What do you know of your audience?” This will drive their ROI and bottom line.
Chloe: During your time at Wayra you advised several startups. Tell us more about about these startups and what were some of the key successes?
Fabio: At Wayra, we had exciting content startups such as Skim.it (a social news app to create personalised news feeds and present the data in a summarised format), Lobster (a user content marketplace to buy/license photos from Instagram, Flickr, audio, videos, text) and Living Indie (the “Netflix of live concerts”, doing live streaming of gigs in HD).
In terms of successes, Skim.it has already exited and signed great partnerships. Lobster has won awards and recently raised an angel round, and Living Indie recently closed a decent seed round on Crowdcube.
Chloe: You recently joined Creative England as part of the investment team. How do you think corporate brands and the creative industry can collaborate and work together?
Fabio: Good question! The creative industries make up a large part of the UK’s leading industrial sectors. It is a broad and diverse sector, which ranges from advertising and crafts to performing arts and video games. On top of their direct economic value, these industries play an important role in catalysing innovation across the wider economy, through the products and services they provide, but also as means of originating and spreading new ideas, knowledge and ways of working.
It’s true that traditional outlets are struggling to adapt, and they are less agile, but it’s probably not as bad as commonly assumed. And more importantly, these trends are disrupting the established value chains and provide considerable potential for growth.
For instance, the migration of content across different media networks and platforms offers creative businesses opportunities to extend services, interact more with audiences, target new demographics and develop completely new service and experience formats.
Broadcasters, brands, and consumers alike have an incredible number of ways to produce and absorb information and need more informative, secure solutions to help manage the content. Consumers no longer serve as silent spectators during the viewing experience. They have become increasingly engaged in what they watch and seek to become part of the story. With the right data, a startup can help audiences find the content they want and involve them in the viewing process beyond just displaying visuals on a single screen.
So it is great you talk about collaboration, rather than disruption, as new technologies will help corporate brands break through the digital noise, and vice versa.
Chloe: When it comes to business intelligence, what do you think are some of the challenges for the creative and media sector to stay ahead of competition?
Fabio: Well, the tech and digital media space is now so complex and the pace so fast, it’s hard to keep up. There is a lot of data out there, and as a startup you can’t be on top of all the evolutions. Any good entrepreneur will have a good knowledge of his ecosystem anyway, knowing key players, influencers and stakeholders.
However, getting information about the deals happening, and competitors’ progress, is very important, and what a founder needs the most is the backstory, the commentary, the relevance of that info. What does it mean for their product and company? What shall they do about this piece of info? This is where business intelligence can help make sense of this data, and platforms like EditorEye can really help when startups begin to scale, become larger enterprises, with teams circulating internal and external information and tracking their industry.
Now, having said all that, Peter Thiel is spot on when he says that startups should not worry too much about competition. Keeping up with the competition isn’t good enough if you want to be the elite. You need to redefine the marketplace as your own, surpass the rest, and carve in and own a niche market. With time and resources limited for a team of 3 or 4, watching competition means not looking after your customers. It can also be too stressful to check what the others are doing anyway!
Chloe: Finally, what do you think is the biggest opportunity for content and publishing startups at the moment?
Fabio: Digital technologies themselves are not “making the market”. Rather, it is compelling content that attracts consumers and audiences, and which gives creative businesses the opportunity to transact over digital platforms, using data to maximise value, to put it very quickly.
It is about creating better content, distributing it more effectively, and be able to prove its lifetime value. It is also about providing new experiences using pervasive media (delivering mobile content relevant to what you are doing), or hyper-local media (geo-based content). This means that the exploitation of IP across multiple platforms has become increasingly critical to commercial success.
Pretty much anyone can create content, so it is about customization and customer research, giving the opportunity to users to build and manage their own content.
Also, having your content distributed by trusted industry leaders will give it an impact other distribution channels won’t. Why? Because when it comes to creating and maintaining a social audience, it takes, not just any content, but great content.
So, what makes a content great? It has to be, or feel, authentic, relevant, timely, honest and credible. Even how it looks is important. This is how an audience will become a subscriber, fan, or follower, or even an advocate of your brand. These fans have real tangible value, and will help startups convert into actual revenue.
In short, data analysis, clever marketing efforts and great memorable content increase lifetime value, which can be converted all the way down to the bottom line, or higher company valuation. Bad content, poorly distributed, erodes trust, and lifetime value.