Here's a theory based on some facts we know..this is just my theory...
1. Ampex has a longstanding, respectful business relationship with video professionals, pre, production and post-production companies, special effects companies etc. For example, they list as customers with Ampex products in their installations the following: George Lucas's Industrial Light and Magic, Digital Domain, Santa Monica Studios(David Rose)and numerous others. These companies have an enormous capital investment in the equipment they need to create. And they face large expenditures to move from analog to digital without necessarily any fundamentally new revenue sources. (Same problem over the air broadcasters face.) They will have to generate new revenues from somewhere.
Post-Production companies like Todd Ao, FourMedia, Laser Pacific (LPAC)(by the by, LPAC is expected to have another blowout 4th quarter for earnings) have relatively low P/e multiples because of the capital investments and the large depreciation going forward;business is perceived as a 9 month business because TV production takes a summer hiatus; and (IMPORTANT) they do not generally own any content themselves. They perform valuable services to the film and tv industry but at the end of the day, they don't own any creative content that will generate continuing revenues from the multiple media distribution channels.
2. Ampex has mentioned video games as a focus for them and Michael Cooper comes from Advanced Gravis, a leading video games equipment company. Surely, somebody like ILM or D2 is looking at the net and the future for interactive gaming and saying we have the best and the brightest talent for creation.
3. Ampex building out an integrated audio and video network.
4. Successful video games are beginning to generate film box office type revenues..take a look at initial revenues for Zelda(N64). They also have the same risk profile.
I think perhaps Ampex will go to their creative customers and say we will help you create proprietary content(video games, CG films etc.) of the highest quality to put out over the net. We will handle the infrastructure, storage, video manipulations etc. You will own the content in a new media that doesn't piss off your film customers. Perhaps they will share revenues from subscribers or advertising.
This is a speculative theory based on reading some of the tea leaves. The one constant is that content is king.
|
