Today’s branded content and media projects require effective Development-Production-Distribution (Value Chain). Whether it is motion pictures, shows or other forms of new media, value added or “rich” content is a paramount underlying asset(s). This includes, but not limited to, original scripts and other related intellectual property rights (IPR) which can be categorized as “alternative asset classes”. In addition, the Value Chain is inherently dependent upon the associated total capital costs (CAPEX).
Total CAPEX may include all “soft” and “hard” costs which make up the entire budget for the media project. This can include content / IPR origination costs; various pre-operative and/or preliminary expenses which must be further apportioned and amortized; project feasibility phase; permits and clearances phase; business development costs; securing “sacro-sanct” transactional contracts covering Production-Distribution; funding/financing costs for entire Value Chain; fees/incentives structure; “sizzle” reels and; other related development and pre-production costs.
Typically, as part of the “means of funding/financing”, total CAPEX must be properly structured in terms of; funding (Seed, Equity, Branded Content etc.) and financing (Loan Guarantees, Senior Debt, Subordinate Debt etc.). For many media projects, the levels of total CAPEX may directly determine the combinations and permutations of types of funding and/or financing. In cases where total CAPEX has “lower” budget(s), funding mechanisms alone may be sufficient to undertake the Value Chain without any need for other forms of financing mechanisms.As part of the media project feasibility phase, it is imperative for Producers and/or Promoters to undertake financial “proforma” modelling / analysis over the economic life of the entire Value Chain. This should include key components which demonstrate; project viability; payback period analysis; profitability indicators; sensitivity/scenario analysis and; risks/mitigation analysis. This methodology and approach can further enhance effective development of branded content and media projects.