Peter Kafka

Recent Posts by Peter Kafka

Why Is Facebook Investor Accel Investing In Hollywood? Because It's a Facebook Investor

Why is a big Facebook investor putting money into a Hollywood movie studio? Because Facebook is going to be very important for Hollywood movie studios.

That’s the takeaway from Accel Partners’ $40 million bet (via secondary shares) on Legendary Pictures, the producers behind hits like “The Hangover” and “The Dark Knight”.

You can already rent “The Dark Knight” on Facebook, via a Warner Bros. test program. But Accel’s Jim Breyer figures the social network will move beyond tests and become an important distribution platform for the movie business–and all content businesses–in the future.

And since Breyer is a Facebook board member (Accel is Facebook’s second-largest shareholder, after Mark Zuckerberg) content-makers ought to pay close attention to what he’s thinking and doing.

Peter Kafka: We’re not used to seeing VCs pour money into Hollywood studios, because they don’t seem like places where you can get huge returns. What is Accel thinking?

Jim Breyer: We believe there are a number of extraordinary opportunities that sit at the intersection of content and social networking platforms like Facebook. And there will be multichannel distribution capabilities for video content beyond classic theatrical and television release.

We try to take a 3-5 year view, and we feel more deeply than ever that proprietary content and creativity that can be delivered across multiple channels is an extremely attractive investment area.

As someone who makes content, that’s nice to hear. Because it seems like most tech investors are interested in putting money into content platforms and distribution plays, not content-makers.

I think in selected cases there’s extraordinary value in investing in content. It is a really unique time for deeply creative content developers to build very signifcant businesses that scale extremely quickly.

This is also one of the reasons behind our opening an office New York, in January. My vision is that a reasonable amount of our New York investments will have a very significant content flavor.

I can already rent and watch one Legendary movie on Facebook. Accel is a Facebook investor, and you’re on Facebook’s board. Where do you think the company is headed when it comes to video?

My hope is that Facebook continues to build out a platform that enables not only traditional video to be distributed, in an extremely meaningful way, but that enables new content and experiences to be deployed creatively, successfuly, and on a global basis.

But does that mean Facebook will become a distributor? Or a retailer? Or a hub where you can consume video?

I think there are number of different models. But at the heart of what Facebook is trying to do is enable outstanding content and application developers to develop breakthrough video and media applications.

So it’s going to fundamentally be a platform where outside companies can set up shop.

That would be my view, as a board member.

What other content plays interest you? What about music? If you wanted to, you could buy a piece of Warner Music Group right now.

We are looking at a wide range of content-driven companies. We are looking at libraries of entertainment, new opportunities in areas such as sports, news, publishing, as well as social games and other applications that fit very well with the social nature of today’s emerging platforms.

So if I own a big catalog of, say, songs, that could be something you’d look at.

That would be correct.

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