Michael D. Moberly January 20, 2016 ‘A business blog where attention span really matters’!
Admittedly, I sum up my media sector experience (public radio, particularly) as being a consistent, perhaps even, exclusive listener and observer since August, 1982. I suspect for some, this admission may inadvertently detract from this post’s credibility and transferability. To that, I respectfully ask readers of this post do so in its entirety and then draw their conclusions.
For media sector engagements, this IA (intangible asset) strategist, will initially identify the key and contributory IA’s in use – not-in-use, followed by a review of conventional valuation methodologies (described below). The intent is to accelerate management team thinking about the importance of and their fiduciary obligation to distinguish and apply their IA’s effectively
Most asset valuation methodologies, for the media consumer sector will likely apply some variation of unit-based measurement, i.e., identify-assess number of listeners, viewers, followers, down loaders, subscribers, page views and duration, programs listened to, and time variances, etc. Conventional techniques-strategies for valuing these assets generally stem from one or more of the following conventions…
- Objective Value – that part of asset value that evolves from either its nature, context, and/or how the asset is applied/used.
- Examples of ‘objective value’ assets are legal or financial documents, strategic alliances, transactions, personnel, employment contracts, and other data/information designated as competitive and proprietary by law or policy.
- Subjective Value – that part of asset value relative to their contribution(s) to organization value and revenue (e.g., pledges, sustaining memberships, donations, gifts, etc.) which deliver market space leadership, competitive advantages, and enhanced reputation.
- Examples of assets with subjective value are donor lists, program sponsorships, pricing strategies, community outreach, strategic planning and marketing initiatives, etc.
- Value-in-exchange – considers the probable actions of consumers, i.e., communities of listeners, contributors, institutional – corporate sponsors and the value at which a particular asset could – would sell if (legitimately) offered on a piecemeal basis.
- An example of a value-in-exchange asset would be introducing a specialized chemical compound into a production process to improve – distinguish a product among competing comparables. The integration relationship and competitive capital (pre-post production) would manifest as greater commoditization value than the chemical compound itself, if it were standing alone.
Note…many, if not most assets, particularly IA’s, possess collaborative and contributory components which in turn produce-deliver additional value, competitive advantages, and sources of revenue.
- Value-in-use – is the value of a unit of IA that delivers sustainable contributory value to an organization. This type of asset is often essential to an organization’s ability to sustain and/or advance market share, its value, sources of revenue, competitive advantages, and reputation, etc., i.e., Coca-Cola’s syrup recipe.
- For example, growing percentages and categories of IA’s are operationally integral to an organizations output by consistently contributing to other facets, e.g., customer/client goodwill and satisfaction, etc.
- Fair Market Value – the price at which a propertied (intangible) asset would change hands…
- providing there is a willing buyer and a willing seller,
- with neither party being under any compulsion to buy or sell, and
- both parties having reasonable knowledge of the relevant facts regarding the assets.
Note…in instances where another’s proprietary IA’s have been illegally acquired – accessed, e.g., through information brokering, economic espionage, or competitive intelligence; without knowing who the ultimate end user of those assets will be and how they will be used, ‘fair market value’ obviously becomes moot or significantly distorted.
Mr. Moberly is an intangible asset strategist and risk specialist and author of ‘Safeguarding Intangible Assets’ published by Elsevier in 2014, [email protected] View Mr. Moberly’s videos on YouTube at ‘safeguarding intangible assets’ or his CNN and CNBC videos at his webpage https://kpstrat.com