This is an interesting business model: UK broadcasters are trading unused ad space for equity in digital media startups, turning them into venture-scale investors.

"The move comes as broadcasters continue to face a tough economic downturn where corporate clients have slashed spending on advertising – which is traditionally seen as a bellwether of the economic climate."

The thing about venture investing is that it doesn't have a short time horizon: exits could easily be a decade away. So this is either a deliberately long game or a really short-sighted move on behalf of the broadcasters, who might not be prepared to hold a basket of liabilities for that long. Of course, they could presumably sell the equity, but that pressure on the secondary market would have the potential to drive the startups' share prices down. Really the broadcasters need to hold onto their portfolios.

I'm very curious to see how this plays out. It's definitely an innovative way to use an otherwise illiquid asset (unsold ad space). I want these broadcasters to survive, and I like the ecosystem-building aspect of this, so I hope it all works out for everyone involved.

#Media

[Link]