Media Happenings 1.7.2011

by samita on January 7, 2011 · 371 comments

With the arrival of the new year (and our new website), we thought this would be a good time to introduce a regular blog series we’re launching here at Scalar in which we’ll provide an overview of some of the big stories in media as well as some things to keep an eye on in the sector. We also frequently post interesting articles and media news (and the occasional funny YouTube clip) on our Twitter account (twitter.com/scalarmedia), so encourage you to check that out as well.  We welcome comments, suggestions, and dialogue on our blog posts and tweets, and look forward to hearing from you. On deck this week? Facebook, CES and predictions for 2011…

Facebook. The new year kicked off with a bang with news of Facebook’s fundraise with Goldman Sachs ($450 million) and Russian investment firm Digital Sky Technologies ($50 million).  The deal values Facebook at an impressive $50 billion (to get a sense of the escalating frenzy, venture capital firm Accel Partners sold a chunk of its stake in Facebook at a $35 billion valuation just six weeks ago).  As part of the deal, Goldman Sachs is also raising another $1.5 billion from its clients via a Special Purpose Vehicle.  This move has raised some eyebrows at the SEC, which limits the number of investors in a private company at 500 before the company has to publicly disclose its financials (Facebook is treating Goldman’s SPV as “one investor”).  An offering memorandum sent to Goldman Sachs clients yesterday did note that Facebook expects to exceed the 500 investor threshold in 2011 regardless.  Legally, the company is required to publicly disclose its financials 120 days after the last day of the fiscal year in which is passes the 500 investor threshold, thus slating a potential IPO around April 2012.  The offering memorandum also noted that in 2009 Facebook had $200 million in net income on revenues of $777 million, and in the first nine months of 2010 earned $355 million on $1.2 billion of revenue… pretty impressive margins for a young company. As a side note, we enjoyed Bloomberg columnist Paul Kedrosky’s take a couple weeks ago on a Facebook IPO as a way to help California’s budget problems in the same way Google’s IPO provided the state with over $4 billion in incremental personal tax revenue a few years ago (as employees cashed out their stock and options).  Add Uncle Sam to the long list of people eagerly awaiting the Facebook IPO filing…

CES. CES kicked off yesterday and runs through Sunday. We’ll have a lot more coming in a full recap next week once everything wraps up. The big headliners this year have been tablet computers, internet-connected TVs and devices, 4G phones, 3D TVs, and gaming.

What to Watch for in 2011. With the end of 2010 came the usual flurry of “lists” recapping the year. Top ten trends in media.  Top ten trends in mobile technology. Top 10 TV commercials (worth a watch, pretty entertaining).  Not to be outdone of course, Time presented us with its 50 top ten lists for 2010. Along with these recaps came the many predictions for 2011. As far as the media world goes, it looks like in addition to the technology-focused CES highlights from above, things to keep an eye on include authentication models for online television content, ongoing retransmission battles between networks and distributors, developments in movie theater windowing (likely the introduction of premium-priced early VOD offerings, much to the chagrin of movie theaters), and multichannel subscriber trends (especially as it relates to cord-cutting).

In Brief. The Oprah Winfrey Network launched to pretty solid reviews and ratings. Google is launching a digital newsstand. The Weinstein Company is buying 25% of Starz Media. The NFL and ESPN are close to extending their Monday Night Football TV rights deal. LinkedIn plans to IPO this quarter. Good read from Fortune on the state of television. Follow us on Twitter for more.

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