Investing for the long term

Expect a media revolution

The global media landscape has been revolutionised in the last ten years. Martyn Hole, Investment Director at Capital Group, expects change to be just as dramatic over the next decade. In the latest Investing For The Long Term podcast, he discusses potential investment opportunities.

There has been a clear backlash in recent years against the early instincts of internet entrepreneurs, in that growing numbers are happy to pay for online content. The notion of paying a monthly fee for access has become embedded with the proliferation of high-quality audio and video services. This model has been adopted for all types of content.

Mr Hole explains the effects of demographics on this change, with the vastly different expectations of younger audiences for how they consume media. As well as changing the world for content providers, this has upturned the advertising industry, which is becoming increasingly sophisticated in the way it reaches its target markets.

Under the radar for many people aged over 55 is the extent to which the gaming industry has boomed and continues to grow rapidly, resulting in recent blockbuster merger and acquisition deals. Millennials and the generations that follow have grown up with, and have matured into, a world in which sophisticated gaming is part of their media landscape.

The web has also transformed gambling, with the creation of new types of experience that appeal to a range of demographics. While most users enjoy these experiences responsibly, public pressure is driving governments to increase regulatory controls. Similarly, in the social media space concerns about their influence on society and politics is also leading to greater calls for state intervention.

Overarching this is talk about the development of the metaverse, with its potential for fully immersive media environments. The commercial, social and political implications of related concepts have yet to be fully understood.

Yet where there is change, there are investment opportunities and risks. This relates to investing directly in or via these innovations themselves, or in upstream technologies and services that enable them to function.

Mr Hole quoted Bill Gates’ aphorism that “people often overestimate what will happen in the next two years and underestimate what will happen in ten.” This underlines the potential scope for investors to succeed if they can identify the key long-term trends, but they can also get their fingers burned if they become too invested in short-term hype.

To learn more about new investment opportunities, visit our site Capital Ideas.