"Epic Presentation" on TV's Future Revealed as a French Kiss to Clients

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Silver Arrow Investment Management

Terence Kawaja, founder and CEO of LUMA Partners recently released a slide presentation titled “The Future of Digital TV “. Business Insider describes the presentation as “epic” and notes Kawaja’s focus on digital media, expertise in the ad tech industry, and how well connected he is. That last point is certainly true. Kawaja has many valuable contacts in this industry. In this case, we believe these contacts are detrimental; a point we expand on later in this piece.

Kawaja concludes that the ongoing shift to streaming video will not harm the existing television network broadcasting business. He notes that “TV spend shows no sign of slowing down. Linear television, the one everyone says is going to die, is a growth industry.” On another page: “So the notion that TV will be cratered by the advent of digital video is simply untrue.” Kawaja notes his many conversations with industry executives, and we haven’t found any factual errors in the presentation. We just think he’s interpreting the facts wrong and drawing an incorrect conclusion.

Why would a firm with great contacts and expertise draw the conclusion that the traditional television business isn’t facing a competitive problem? One possibility is LUMA lets us know in the presentation that they spoke with many industry executives. Talking with senior company leadership can be an important part of any due diligence process; however, those people are also likely to miss big changes because they are paid to see how their companies can succeed.

We don’t remember many newspaper executives in the mid‐‘90s insisting their businesses were about to crater. We suspect that several hundred years ago, scribes thought the demand for handwritten books would continue to last indefinitely and that the whole printing press thing wasn’t really a threat. Give us ten minutes, and we’ll come up with another ten examples. The history of technology is full of companies that don’t see the impact that new technology will have on their business.

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