Pioneering any industry is a tough, expensive business (as the many veterans of the dot com era will tell you).
Having a great idea is almost the easiest part of starting a business; building the business, executing on an idea, winning customers and funding the business is far more difficult.
Considering how hot everything TV on IP at present thanks, by and large, to the meteoric rise of Youtube, I'm surprised by how little enthusiasm there has been to invest in companies in this sector. It seems to have been especially tough on public companies, who should have ready access to capital markets.
Word from several sources reaches me that Roo are struggling somewhat as they tap the Street again, trying to fund their rapid global expansion and Narrowstep had a rough time during its last fundraising round some six months ago (Narrowstep is now fully funded for the foreseeable future).
Private companies have fared better, with both theplatform and Video Networks now bought out by Comcast and Tiscali respectively. But the outstanding result to date is that of Jump TV, who cam to market with under $2m of turnover, but managed an IPO valuation of around $170m. Maybe the wind is changing..
With valuations varying from three times revenues to eighty times revenues, there's clearly little consensus in the market, although, perversely, companies in the US seem to be hugely undervalued against companies in Europe - probably a result of the ridiculous burden the US financial markets put on public companies and the resulting reluctance by investors to invest.
But, this is a huge industry with only a few leading companies; without doubt, there will be some real winners from investments in this sector.
** Not to the US authorities - All information in this article reached me via the public domain, so please don't extradite me **