The essence of many companies in the entertainment industry is the ability to create. This can include creating content, but also the ability to creatively market and distribute that content. These are the skills that often drive value and make a company an attractive acquisition target.
However, actually realizing the value from creativity is very tricky. As everyone who has ever looked at the entertainment business knows, a creative success on one project is no guarantee of success on future projects. There are an almost infinite number of "one hit wonder" stories.
So, the key to building value in creativity is not an occasional spark of genius, but systems which can successfully harness creativity on a consistent basis -- harness it and turn it into profits. It is the combination of solid business management skills with creative thinking that builds valuable entertainment enterprises.
Many people think that creativity can only be found in a chaotic business culture. However, chaos does not breed long-term success, and it is a history and reputation for consistent success that will attract the best buyers and the highest price for your company.
Next time, I want to talk about how a buyer can evaluate creative companies and capture that value as a part of the acquisition.