After the announcement that Variety was going on the block, there has been much speculation about who the potential buyer might be.  For the article "Is There a Buyer That Can Steer Variety Into the Fast Lane?" although Seave has no direct knowledge of who is looking at the financials, she did not hesitate in speculating about who should be an appropriate buyer.  Dismissing the categories of  b-to-b publishers or data companies as potential acquirers,  "Seave said the key is finding a buyer, like a Bloomberg or a Dow Jones, that could leverage existing infrastructure. 'Bloomberg is super smart, and they do care about media,” Seave said. “They can, in a really intelligent way, use the content and are really great with data.'” To read the entire story, go here.

Albert Wenger was February’s “Media Guru” at the breakfast series organized by Quantum Media, and hosted by the Harvard Business School Club.  Unlike most of these talks, Wenger chose to speak “on the record” at the packed breakfast; he said that it seemed appropriate that since his company is an investor in Twitter to not encourage use of the network.

When asked about the role of intuition in making venture capital investments, he said intuition was just one part of the process. He cited five areas that influence the investment decision:

1. They have a very precise idea of what they are looking for - -which are applications that form networks.  “Application innovation is where we see a need.”
2. They look at a lot of similar ideas in a small space, so have context.
3. Most of their investing is in services that have already launched, so can evaluate the quality of the idea very directly.
4. They look at the Google analytics of the product.
5. Intuition.

USV’s investments tend to be relatively small compared to VCs in more traditional areas. For energy, say, the capital intensive activities are in building the initial “engine.”  For internet/digital based innovations, there is very little capital deployed in the beginning, but if the network gets large, than a lot of capital is needed to support that infrastructure.  For example, for Tumblr, a company in their portfolio, now needs $1,000,000 per month to pay for bandwidth.

Other topics  Wenger discussed:

• Facebook’s valuation:   Facebook will be able to justify their high valuation if they turn out to be good stewards of the network.  Network effects are like levering interest – great on the way up, equally negatively effective on the way down.
• Copyright laws:  They benefit “incumbent, hierarchical” industries and are used to fight networks disrupting the industry.  The example given was Etsy’s handmade toy market disrupted the big toy makers/distributors, so there are lobbying efforts to try to more strictly regulate hand-made toys.
• Efficiency:  “We believe networks are much more efficient than hierarchical companies.”
• Building communities of trust:  Transparency is key. Heavy moderation works, but doesn’t scale. Internal ratings systems are a good tool.  The portfolio company Edmodo for K-12 teachers, students and parents is working on this problem by having lots of features that let people flag inappropriate content, and not allowing any private communications.
• Centralized networks:  We are now in the Golden Age of Centralized Networks (like Twitter.) But we are expecting that protocol/decentralized networks will eventually rule.

Quantum Principal Stefanie Lemcke has a deep expertise in online video content and technology companies. She has been selected to moderate a panel at SXSW Interactive entitled: "This New House: Building Video Brands Featuring Bob Vila." The panelists include Steve Masur, Senior Partner, MasurLaw, Matthew Corbin, Chief Product Officer, Digital Broadcasting Group,  Gretchen Grant, GM of Bobvila.com (and advisor to Quantum Media)  and icon Bob Vila Owner and Founder of Bobvila.com. Vila, considered the father of reality television,  in fact is still  a household name 32 years after the premiere of his first TV series, “This Old House. "  Lemcke and the panel will discuss how digital video contributes to the strength of his web site, including: what leading edge video platforms are available, tools for building audience, tracking usage of video, serving advertising and accessibility to mobile.  For more information about the talk, go here.

Quantum Principal Alison Anthoine who has been a practicing attorney for more than 30 years has used this expertise as co-founder and President of Paperlex, a brand new company that will offer templates of documents for free that consumers can tweak as needed -- versus established competitors Nolo and LegalZoom which charge.  Read a recent article that describes the vertical and where Alison is quoted. For more information or to sign up for beta acess go to the site.

800-CEO-READ, a leading direct supplier of book-based resources, compiles a monthly list of best-selling business books based on purchases by its corporate customers nationwide. For the latest month released, November 2011, event though this is two  years after its original publication date,  "Curse of the Mogul:  What's Wrong with the World's Leading Media Companies," coauthored by Quantum Principal Ava Seave (with Jonathan Knee and Bruce Greenwald) is number 20, in the top 25.  To read the entire list go here. 

Quantum Media Principal, Erica Gruen was quoted as an industry expert in Crain's article "Oh no! Oprah Winfrey's new network is struggling: Broadcast success hasn't translated to talk-show host's cable network." 

Gruen commented on the lack of pull "uplifting" programming can have for an audience, comparing this to failed efforts of Oxygen network when it first debuted.  To read the entire article, go here. 

David Breecker, Quantum Media affiliate, is the President and chief consultant of The Santa Fe Innovation Park. Among its current projects, the company is helping artist Sydney Cooper crowd fund  her "social sculpture" effort that approaches self portraiture in a highly unusual way. 

Cooper writes, "Our interactive, multi-platform  project engages participants in the creation of dynamic, layered self-portraits. This creative process allows a single person or a whole community to draw maps representing experience, interests, values, and more. Portraits are personal and intuitive, recording each participant’s taste, memory, peeves, hopes and stories in a rich visual matrix of interconnection." See a video of Breecker interviewing Cooper about her thinking and of some contributors making art.

(Read more about Breecker and SFIP -- a real-world R&D laboratory for social systems innovation that features transdisciplinary collaborations, bringing together institutional and individual leaders from industry and commerce.)

Stephanie Lemcke will be the keynote speaker at the TV 2.0 Summit in Zurich, Switzerland on November 17, 2011.  You can find more details, in German, at the ipmedia website here.

Lemcke will also be a panelist at Germany’s most important media conference, Medientage Munchen 2011, on October 21.  You can find more details, in German, at their website.

Quantum Principal Ava Seave will moderate a panel discussing the new direction of the magazine industry at the MPA’s American Magazine Conference on Tuesday, October 4, at 9am.  The event will be held at the Grand Hyatt New York, 109 East 42^nd Street, New York, NY.10017.  You can find more information and make advanced registrations at the MPA website here.

Where Are Magazine Media Headed?  The View from the Top  The leaders of several magazine companies will engage in a candid conversation about the new direction of the industry, the challenges they are facing, the untapped potential of tablets, their views on acquisitions and partnerships, and what keeps them up at night. They’ll also discuss how they are driving positive change in their organizations. Attendees to this panel will get a revealing look into the inner thinking of some of the industry’s new leaders and their vision of the media future.

Moderator:   Ava Seave, Principal and Co-Founder, Quantum Media

Panelists:   David Carey, President, Hearst Magazines

Tom Harty, President, Meredith's National Media Group

Robert A. Sauerberg, Jr., President, Condé Nast

Peter Katz and Rich Silverman interview Quantum Principal Ava Seave on their podcast for Hollywood 2.0.   Seave was interviewed to explain the focus of “Curse of the Mogul: What’s Wrong with the World’s Leading Media Companies,” co-authored with Jonathon Knee and Bruce Greenwald.  “Curse of the Mogul” is available now in paperback from Amazon and other outlets.

When asked by the hosts which type of mogul would best be served to read the book, Seave replied, “Most of the guys that we talk about started out being smart guys with good companies.  They specialized in an area, and made a lot of money in that area.  They read their own press, and decided they could go ahead and use their genius to go to other areas that they didn’t really know very well.”

You can listen to the entire interview on Hollywood 2.0 website here.

Quantum Principal Christine Arrington has joined the faculty of the Jon M. Huntsman School of Business at Utah State University in Logan, Utah as a Senior Lecturer and Co-Director of Strategic Marketing and Brand Management.

The Huntsman School is the oldest continuously operating business college in the Western United States and one of the oldest in the nation. The stated goals of the Huntsman School of Business are "to be a career accelerator for its students and an engine of economic growth for its communities, the state, the nation and the world". The Huntsman School focuses on four areas of educational development. These areas have been entitled the "four pillars" and they include analytical rigor, entrepreneurial spirit, ethical leadership and global vision.

Quantum Media Principal Ava Seave is an invited participant to the “What Matters Now?  Proposals for a New Front Page” exhibition at the Aperture Gallery, scheduled to start September 17, 2011.  The exhibition addresses the impact of the decreased reliance on a traditional front page as a common reference point in the digital media age.

Ten years post-9/11, at a time when we are more overloaded with information than ever but cannot access it in a coherent manner, Aperture will create a visual café for collective social engagement with the question: What Matter’s Now? and turn it into an evolving exhibition space. During a two-week period Aperture will turn itself “inside out,” letting participants engage in the editorial process of weighing questions, ideas, and images, and proposing conceptual and curatorial solutions. Both invited guests and gallery visitors will be asked to participate. 

The exhibition What Matters Now? Proposals for a New Front Page will combine the crowd sourcing of images and ideas with the curatorial engagement of six experienced individuals, each hosting a table and a conversation within the space, where on corresponding walls each group will present its proposals for the contents of a ‘New Front Page’.  Hosts include a variety of visual image specialists: Wafaa Bilal, Melissa Harris, Stephen Mayes, Joel Meyerowitz, Fred Ritchin (who conceptualized this project) and Deborah Willis.

The Aperture Gallery is located at 547 West 27th Street, 4th floor, New York, N.Y. 10001.  You may read more about the exhibition here.

"The Story So Far: What We Know About The Business of Digital Journalism" is available at Amazon and on the Kindle.  The paperback, published by Columbia Journalism Review Books, was co-authored by Bill Grueskin, Quantum Principal Ava Seave, and Lucas Graves.

The report focuses on the economic issues that news organizations - large and small, old and new- face with their digital ventures.

You can read an excerpt and order the book on the Amazon website.

From its launch in 2005 until its sale to AOL in 2011, The Huffington Post online gathered a huge audience of unique visitors—Google says 60 million, ComScore says 30 million--and it reached $60 million in ad revenue. CEO Eric Hippeau described the principles that produced this entrepreneurial success.

A bit like “Forrest Gump,” Eric Hippeau (pronounced EeePoe) seems to have been in many interesting places at just the right time.  Call it prescience or instinct—or call it operating from a set of business principles that guide his choices.

“In every major economic cycle, there is one big breakthrough company,” he said, at the Harvard Business School Club of New York on April 5, 2011.  He was speaking at its popular “Media Guru” series of breakfasts, not long after his triumphant $315 million sale of The Huffington Post to Time-Warner spinoff AOL.

He recalled watching years earlier as Ted Turner built CNN into the breakthrough company of its cycle, creating a 24-hour cable news channel, built on excellent video from all over the world.

Like Facebook in the social media space and YouTube in the online video space, The Huffington Post was that breakthrough company in the digital news, opinion and blogging space.  “It has created a new genre, open-source and very social,” he said.

You can read the detailed reasons Hippeau lists for the success of The Huffington Post on the Casium media case study website.

Quantum Media Principal Stefanie Lemcke will deliver a keynote address at the International Audiovisual Media Days (AMD) event to be held on June 7th - 8th in Munich, Germany.  The AMD is a conference for the entertainment and communication tools: online-video and web TV. The main focus this year is on moving-image content, its conceptual design and best practice in media and companies. In recent years, the AMD has become the information and business platform for moving image.  It is the first two-day conference of experts devoted exclusively to the topic of strategies for moving pictures.

Lemcke will be speaking on “Creativity and online video – Best practice in the US” on June 8^th.  You can find more information about AMD here, and those conversant in German may find more information here.

Digital media's economic conditions are addressed in "The Story So Far: What We Know About The Business of Digital Journalism", a special report by Bill Grueskin, Quantum Media's Ava Seave, and Lucas Graves.  According to Seave, "the report will examine some legacy business models for media, but our focus is on the economic issues that news organizations face with their digital ventures.   We confine our report mostly to companies in the commercial market."  She further goes on to explain the difficulty in obtaining quantifiable information.   "There were real challenges in preparing the report.  Not only is a lot of the data about digital ventures completely invisible because it is a small part of big companies or the major part of private companies, but it's changing all the time."

There is a release discussion with co-authors Grueskin, Seave, and Graves at Columbia University Graduate School of Journalism, Tuesday, May 10, 2011.  The reception will be from 6:00pm to 7:00pm in the World Room, with the Panel Discussion taking place from 7:00pm to 8:00pm in the Lecture Hall.  The event will be moderated by author Ken Auletta, with opening remarks by Nicholas Lemann, Dean, Columbia Journalism School, and Emily Bell, Director, Tow Center for Digital Journalism, Columbia Journalism School.  See details and how to sign up in Quantum's list of Events.

A German-owned publisher, with some 34 profitable music-oriented books, magazines, websites and special issues, launched a single title in the U.S. in 2007, with a very small operation.  While the German company is the Goliath of music in Germany, it is the “David” in the U.S., going head-to-head with a 34-year-old dominant player in this particular music category.

A Quantum Media Principal was engaged to evaluate the business and help bring it to profitability.  Key strengths of the business were:

·         Clear differentiation through inclusion of a CD with every  issue, featuring master classes with master performers in the category

·         A relatively high single copy cover price, and strong newsstand sellthrough

·         The Editor-in-Chief is a talented professional musician, who owns a recording studio and has a personal relationship with many top performers

·         The Managing Editor is resourceful, very knowledgeable about the field, and an operations wizard

The editorial quality is high, and a relatively straight translation of the U.S. edition into Chinese has sold surprisingly well in China.

Quantum Media worked closely with a newsstand specialist to identify opportunities to match the most profitable distribution of the key competitor.  This resulted in a 70% increase in newsstand draw, from the low point in May 2010 to the March issue in 2011, while maintaining a healthy sellthrough, with the average for 2010 coming in 8.5 percentage points above the national U.S. average newsstand sellthrough for 2010.

Next, the magazine tested and adopted the “small-envelope insert subscription-offer” that a number of U.S. magazines use as a “control.”

A new professional ad salesperson was engaged, and a subscription acquisition campaign has been developed, with expected overall breakeven by early 2012.

A master home chef and a successful entrepreneur engaged Quantum Media to evaluate the potential for success in launching an information business into a very hot health category that seemed to be getting overcrowded.  They were interested in positioning the business within “healthy living,” rather than within “disease control.”

The Quantum members affirmed the size and rapid growth of the market segment, and gathered information on the large numbers of books, websites, blogs, Facebook pages, apps, online searches, local groups, foundations, and consumer packaged goods products in the space.

The vast amount of activity in the category, even at a relatively early stage, suggested real demand.  The next issue was what positioning, for a first product and a set of cross-platform media products, would be differentiated enough and appealing enough to be profitable.

Then Quantum crafted nine top candidates for best positioning, and developed a “positioning analysis” tool, with seven criteria each weighted from 1 to 5, for choosing the strongest positioning from among them.  Among the criteria were:

·         Social media potential

·         Distinctiveness and strength in the marketplace

·         Franchise-ability—can it be extended from a core product to other products

·         Availability of an appropriate related URL and handle

Finally, based on a thorough overview of recent book sales in this and similarly narrow categories, Quantum put together a financial estimate for a first product, a cookbook, showing the likely range of profitability.  This was supported with a marketing plan, marketing budget and timeline.