Production company plots Stock Exchange listing

Friday 22nd June 2001

ON CLOUD 9: The Tribe leads the production company's successes

By Rob Hosking

Wellington production company Cloud 9 has revealed it expects to float some of its subsidiaries on the Stock Exchange over the next few years.

Chief executive and founder Raymond Thompson told a Wellington Regional Chamber of Commerce breakfast this week that part of the company's long-term plan is to launch at least some of the subsidiaries, which include a distribution arm and an internet division, on the sharemarket.

"That is some way down the track, but probably within five years or so," he said.

The company has been approached several times by various suitors interested in taking a stake, he said, but at this stage there were no plans to make such a move.

One UK firm, the London Stock Exchange-listed Sanctuary Multimedia, has a minority stake in Cloud 9.

The company's subsidiaries include distribution arm Cumulus, music publishing and merchandising divisions, and the internet-based corporate training video firm, Little White Cloud.

The firm also has a highly active internet portal based around The Tribe, a highly successful children's thriller series with an international cult following. The website dedicated to the programme gets six million hits a week, he said.

The company is also looking at partnerships around the world, he said.

"We've invested a lot into the internet as a broadcasting system. We're only five years away from consumers being able to programme their own night's entertainment, and we're in talks with overseas broadcasters about ways to do that," Mr Thompson said.

Cloud 9's approach emulated that of Disney, he said. The emphasis was on programming content and building up a brand. The company would keep its focus on children's programming and although subsidiaries would probably be floated off, the core company would remain in private ownership.

"We have a catalogue of programming and very valuable intellectual property based around that. It can be exploited in perpetuity and can be capitalised in these niche channels which are coming on over the next few years."

The company has invested over $100 million in the local economy since its inception in 1994, and Mr Thompson said it was valued at $400 million.

He was highly critical of the approach by Television New Zealand and, to a lesser extent, that of New Zealand On Air. "TVNZ is examining potential new revenue streams, and they're looking at digital distribution, and there's white papers and green papers and all sorts of reports on where they might find it. But to me the core of this business is content, and I don't understand why TVNZ isn't really investing in that."

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