For decades, investors have been taught to diversify across asset classes: equities, bonds, real estate, private equity and infrastructure.
But diversification is ultimately not about labels. It is about what actually drives returns.
This distinction matters today. A portfolio may look diversified on paper while many of its investments remain exposed to the same interest rates, financing conditions, economic cycles and exit markets.
This is where intellectual property, or IP, in media and entertainment becomes interesting.
Film, television, digital creators, games and other forms of content IP can be investable assets built around something increasingly scarce: audience attention.
Successful IP can travel. A film can generate revenues through cinemas, streaming and television, across territories and over several years. Successful stories continue through sequels, remakes and other rights. A creator can build an audience on YouTube and extend that relationship into podcasts, live events, consumer products, brands, film or television.
One piece of IP, or one relationship with an audience, can create several revenue streams across platforms, formats and years.
For investors, this does not mean that content is without risk. Clearly, it is not. The interesting point is that its return drivers can be different from those influencing many traditional financial assets.
At the same time, the media industry itself is changing.
A successful film does not become successful because interest rates fall. People do not watch a television series because GDP growth exceeds expectations. What matters is whether people want to watch, listen, play, participate or follow.
At the same time, the media industry itself is changing.
For a long time, investing in content largely meant financing individual productions. Increasingly, the opportunity also includes businesses that create, own and repeatedly monetise IP, audiences and brands.
Creators can build global audiences directly. Media businesses can develop IP across several platforms and understand their audiences almost in real time. Distribution becomes more direct, customer relationships more valuable and successful concepts easier to move between formats.
This changes the investment question.
It is no longer only about who finances the content. Increasingly, it is about who owns the underlying IP, who owns the relationship with the audience and who participates when a successful idea moves from one platform to another.
Luxembourg has an interesting role to play here. Its strength as an investment centre has always been its ability to provide international capital, sophisticated structures and strong governance for new investment strategies.
On 22 September, investors and media-industry leaders will come together in Luxembourg to discuss this emerging investment universe, from Media IP as an Asset Class and the next generation of content businesses to a real investment case such as BlackBerry film.
The question is no longer simply: what content should we finance?
Increasingly, it is: what IP and audience relationships should we own?
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