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Investor Relations - Sector Overview |
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The last year has seen DCD Media come into its own. It now offers investors the ability to gain exposure to the increasingly lucrative shift in power from the large media broadcasters to the higher quality content producers.
DCD Media has established itself as a vertically integrated production and distribution house. Specifically, it sources and creates niche media content and is then responsible for its distribution. This model was given a significant boost in 2004 when Ofcom, the regulator, published its code of best practice with regards to the sourcing and distribution rights of content between the large broadcasters and third parties. Before this date the large broadcasters were able to use their favourable negotiating positions to secure universal distribution rights in return for upfront fees for the production of content. Under the new contracts, production houses have been able to licence their programme rights in the UK only (and sometimes the US) in return for advances to cover production costs whilst retaining the distribution rights to all other territories. One important consequence of this is that, for production companies such as DCD Media, which has a valuable and growing portfolio of high quality material, it is now significantly easier to leverage the value of their assets.
The recent series of acquisitions of September Films, Prospect Pictures and West Park Pictures were made with a view to broadening DCD Media's production capabilities in the appropriate areas. They give DCD Media maximum scope to take advantage of this step change in the industry to raise the Company's profitability in the medium and longer terms.
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