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Tom, Jerry and Scooby-Doo: A new recipe for long-tail returns?

entertainment industry, investing in children’s entertainment

As the likes of Netflix and Apple disrupt the entertainment industry, investing in children’s entertainment could be a new alternative.

That’s according to investment manager Global Merces, which is launching a Media Ventures Fund investing in children’s animation assets, gaming companies and developers of virtual reality content.

Speaking at a media roundtable in Sydney on Thursday, former president of Warner Bros Animation and Global Merces advisory committee member Sander Schwartz said, “In the US a decade or so ago, there were 40 or 50 new drama shows that were produced every year. This year, I read a figure that it was 263.”

He continued, arguing that the value of content lies in its quality and this comes from good storylines, scripts, actors and production values.

“What attracts me to the kids business is that kids’ properties can become evergreen. They can carry on for generations, Mr Schwartz said.

“I've produced seven seasons of Scooby-Doo and five seasons of Batman and four seasons of Tom and Jerry.

“And … those intellectual properties will continue to play for the next 100 years or more, now that it's digital and it can be accessed on your phone or television or movie screen or on a plane.”

Global Merces chief investment officer Adam Schoff reiterated the perpetual value of quality content, adding that the fund will be focusing on a broader spectrum than just Apple and Amazon, pointing to Crunchyroll, a streaming app dedicated to Japanese anime with more than 2 million followers.

“For us it's about investing in those businesses that are beginning to understand what the new revenue models might be and how you could capture that revenue,” he said.

The fund will be open to both wholesale and retail investors, with retail investors able to invest through the Global Merces Access Fund.

Managing director and CEO Holly Grofski said the decision to open the fund to retail investors was the result of a post-GFC landscape in which ‘mum and dad’ investors were constantly searching for alternatives and ways to boost their yield, while also pulling away from financial planners.

“What this has created is a lot of genuine attempts to look for alternative investments,” she said.

 

Tom, Jerry and Scooby-Doo: A new recipe for long-tail returns?
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