<partly OT>
Hello again, B.A.M.
I am in fact waiting for the right price to buy into AXC. Looks like this week maybe.
I think you and I will just have to agree to disagree on the future of interactive video. Eyeballs matter, yes, but at the end of the day it is content that drives eyeballs. I expect that the current portal metaphors will give way to a more organic Internet/interactive TV experience within 2-3 years. The only hold on the eyeball by a broadcaster will be in those cases where the company that controls the last mile grabs the eyeball for the first 3 seconds--if the government lets them. The browser of the future will be more like an intermixture of today's browser and push technologies, maybe an evolution of the Pointcast-type of model. No one portal will control anything, the user will control everything.
In that world, except perhaps for the first experience when you turn the set on, it will be the user who controls, not the broadcaster. If you buy content, as BCST will do, you will be competing with a large group of others and your margins will decline as bargaining power shifts to the content creators. If you find niches, build it, and create barriers to entry along the way, as FasTV and VDAT are doing, then you create the ability to generate lasting margins - selling your content to the broadcaster willing to pay the most for it, and eating into the broadcasters' margins in the process.
Sure, BCST can sign Rush Limbaugh and Art Bell, and make money today because the market is young there are few viable competitors vying for their presence. Once there are, you think Rush is going to continue to deal with BCST if AOL, TWX, DIS, YHOO, or someone else offers him more money? I doubt it. Why do you think star actors are constantly holding up the producers of network shows? Because they ARE the content.
And by the way, if VDAT was following BCST's price up, maybe you can explain why (a) the timing was so much later, and (b) VDAT's rate of return has been higher (unless you got the IPO price for BCST, which most mortals couldn't). As I figure it, if you bought BCST at $60, the low of the trading range on the IPO day, and sold it for $95.50 post-split, you made 218% profit. Not bad, but if you bought VDAT at its low of the same day you'd have made 292% over the same time, based on yesterday's close of $13 7/8. Make the same calculations fron December 1 and VDAT returned 484% vs. 203% for BCST. Not to criticize BCST's performance, but don't kid yourself that VDAT is following BCST. JMHO.
As to my $200 prediction for BCST, time will tell, I'll concede it's gotten closer than I expected. I've given up trying to predict net stocks, bad for the health. Just try to buy 'em low, sell 'em high. I'm not anti-BCST in the short to medium term, I'm just not sure how they will evolve their business model to make money long-term. I've read their business plan in detail and I think they're great entrepreneurs but I'd have flunked business school if I had submitted a final exam with a plan like that.
If BCST can evolve, more power to them -- but I think the next genration train is acomin down the tracks and they (and you) don't see it yet. That's okay, if we all had the same opinion then there would be no need for a stock market.
I for one expect VDAT will be at breakeven by year-end and will have created significant barriers to entry in several of their niches. And that's where my heaviest investment has been and, for time being, will remain. I'll play other interesting opportunities like AXC as well--I like Grady's model a lot better than BCST's, too. From time to time I may even play BCST as a shorter-term opportunity.
dr |
