This post is a prequel to Himanshu Mody’s post on Times Treaty hosted yesterday . After all, if George Lucas can make Star Wars backwards, why cant a Rodinhood post a blog backwards?!!
Essentially, a lot of ‘value’ in the real world ‘expires’ in short periods of time – like perishable commodities.
So, think of a Hotel Room that lies vacant at night since no one has checked into it. Or the seats in an Airplane that remain unoccupied the minute the cabin of the aircraft gets shut.
The biggest perishable commodity of course is MEDIA – ads that remain unsold in Newspapers and in TV channels etc.
So, how do owners of such perishable goods try and monetize that value in the best possible way?
The large Media Groups like Times of India have created business units that ‘barter’ their ads space in their various media products (print/tv/online) for equity in small yet promising companies that may become very valuable in the future.
So, think of it simply – Times ‘gives’ away say Rs 100 worth of ads inventory in exchange for a Company that is say valued at Rs 1000. So, Times get 10% of that company in exchange.
Now, that Company uses the Times of India ads and creates more business for itself.
After say a few years, 3 possibilities exist:
– The company get sold for Rs 3000 – so Times makes Rs 300 on its investment of Rs 100
– The company gets sold for Rs 1000 – so Times recovers its money
– The company goes under – Times recovers zero.
In any which way, since the media was UNSOLD, Times Group loses nothing.
The reason I post this is to wonder WHY Airlines and Hotels dont offer their wares to start up’s like us?? I mean the offer should be fly for free and stay for free in exchange for a few % points in our Companies?
ONE OF MY MOST FAVORITE HOTELS IN THE WORLD – THE GEORGIAN SANTA MONICA – SIGH ….CAN I STAY HERE FOR BARTER?
Himanshu’s post and the discussion on it will explain the viability of such barters. Check it out and wonder if your business is ready for such an exchange??
(Link – https://www.therodinhoods.com/forum/topics/times-private-treaty-pros-and )