Article: Why Would U2's Bono Promote Meerkat? What's In It For Him? (Forbes)

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Forbes: Why Would U2's Bono Promote Meerkat? What's In It For Him? - Forbes

Why Would U2's Bono Promote Meerkat? What's In It For Him?

U2 just wrapped up their iNNOCENCE + eXPERIENCE Tour in North America with final shows at Madison Square Garden in New York City. In their first show in Silicon Valley, before Bono began singing “Desire,” he asked an audience member to come up on stage and share the event all over the world via Meerkat, the hot new startup with a live video streaming app. The audience embraced this seemingly spontaneous moment. But I think that U2’s lead singer Bono had put a lot of strategic planning into orchestrating the whole thing.

The Irish singer has long been a fan of startups and has been investing in ideas, from Yelp to Dropbox, for years. Bono isn’t just an entertainer; he’s a venture capitalist. After being introduced to the Silicon Valley investment scene by Sheryl Sandberg of Facebook, Bono started working with the private equity firm Elevation Partners to make large investments in media, entertainment and technology companies. Elevation Partners was one of the early investors in Facebook, a move that made them millions. Today, Bono and Roger McNamee, a founding partner of Elevation, continue to make investments in technology companies.


So, why is Bono interested in Meerkat? As an entertainer, and as an investor, Bono sees the game changing nature of live video streaming technology, the massive opportunities, and wants to play in the space. Broadcasters, content creators and consumers will all be impacted. Many questions around live video streaming are yet unanswered. Will it go freemium? Or paid? Or monetized by heavy ads? These are all questions that Bono wants to play a part in answering. As for Meerkat, the boost Bono provided has put them in a strong position to become a major player in the space.

But, the company is still recovering from a really rocky start, and has challenges ahead. Just a few weeks after Meerkat launched their app in February 2015, Twitter TWTR +0.00% blocked the company’s access to social graphs, making it more difficult for Meerkat to acquire users. Parallel, Twitter launched its own live video streaming service, Periscope. Of course, Periscope had full backing from and access to Twitter. For Meerkat, this blow could have killed them. But with true startup drive, Meerkat quickly made a strategic move and partnered with U2. I went to two shows on the North American tour, their kickoff in Silicon Valley and closing in New York City. On just those two nights, Bono promoted Meerkat to over 35,000 people. From this, their user base will continue to grow, their publicity will increase, and they will be in a stronger position to negotiate deals with other entertainers.

If Meerkat can make a few key business moves, they have hope for the future. I think they should make every effort to further build the partnership with U2, and develop partnerships with other bands. Parallel, Meerkat could form partnerships with content distributors like Comcast CMCSA +0.20% or AT&T. And of course, it will be critical for Meerkat to continue to invest in R&D and further enhance their technology.

So what does Bono gain from the partnership? Beyond being able to shape the new market of live video streaming, I am sure that he has some stake in the company. And he knows that with his involvement, Meerkat can get to the next level, and potentially, a rewarding exit. I think there are three possible exit scenarios for Meerkat.

One could be an acquisition by Facebook. Just Wednesday, the social media giant launched a live streaming video service of its own for celebrities. Only VIPs and celebrities verified authentic on Facebook can use the technology. Some promoters already include The Rock and Serena Williams. Meerkat, with its existing user base and complementary technology, could be a perfect fit for them.

Second, Google could buy Meerkat. Despite around $4 billion in revenue, YouTube has yet to make Google money. Acquiring Meerkat, then merging the technology with YouTube’s live streaming service, could help them take YouTube to a whole new level and finally be profitable in the space.

The third scenario I see is an acquisition by Apple. With rumors swirling about negotiations with cable networks to offer live channel subscriptions through their Apple TV, I’ll bet that they have their eyes on technologies that could complement their offerings. Meerkat’s technology – and popularity – could help Apple, in true Apple fashion, dominate the live streaming space.

But Meerkat is still a startup, and the future is uncertain. However, with a rainmaker like Bono on the company’s side, they have a greater chance than others to make it. Their partnership is a great example of how entertainment and technology are combining to create value. As the worlds of entertainment and Silicon Valley merge more, expect to see more investments, partnerships and deals that increase the levels of business innovation.
 
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