Howard Stern And Oprah Together Are Worth Less Than Instagram

Creating 40+ hours of unique content on his radio channels each week, Howard Stern is completely under-valuated if you compare it to apps that do nothing.
Creating 40+ hours of unique content on his radio channels each week, Howard Stern is completely under-valuated if you compare it to apps that do nothing.

I have written about the value of Instagram before. The $1 bn dollar deal that Facebook got on a system that allowed the taking, sharing and basic fun-editing of photos on the iPhone (at that moment). Earlier this week, it became clear that Liberty Media is allowed to  gain control of over 50% of the shares of SiriusXM. The amount invested in the satellite radio company is $535m.

This is a real business and in my ignorant opinion, because that is not my area of expertise. But knowing that the company actually owns the satellites it uses, has financed all the research, has 23.4 million paying subscribers each month for $14 a month, and creates all its own content, or acquired the licenses to broadcast the content. And on top of that, has exclusive celebrity contracts. In other words, there is something solid here.

I have a couple of subscriptions to SiriusXM. Driving in a car for about 3 hours a day, for me the monthly subscription fee is nothing compared to my fuel costs, and it keeps me entertained. So I am pretty familiar with the product. I personally love listening to Howard Stern, but I am very well aware of all the other deals that they have with other celebrities, which may or may not be on air themselves, but do own their own stations like Oprah Winfrey, Eminem, and many others. But let’s not get this into a commercial here.

Liberty media invested over $500 to get access for the 49.9% of the company. Now, they are allowed to buy more of it. Putting the value of the company to $1bn.

So, let me rephrase all of this. Doing the research, build, launch and own your own satellites in outer space, creating an online, satellite, and mobile broadcasting platform, having 23.4 million paying subscribers = a small app that changes basic photo settings and sends it out to your friends.

I am not kidding here. And worst of all, as any app developer knows, parts of this Instagram app are built on the foundations laid out by Apple, or any other handset manufacturer.

This part of web development world feels like Disneyland to me. It is fun to be at, but it doesn’t feel completely real. Sometimes it feels like the bursting of the internet bubble in 2001 really is something from a forgotten past. Right now, it is still easy to build something for the web. You can do it from practically any device, and you can update it whenever you need, so it is absolutely forgiven if a production goes live with bugs still in it. This, in comparison to shipped software. I remember the time the message got out that ‘the time you could create commercial computer games in your attic was over’. Because, that was what happened before. But the web development is this weird world where everything is combined.

If you go to any of the app stores right now; Apple, Amazon, Google or Windows, they all are popular by the amount of apps in there. It is even the calling card for the app stores. But if you take a real good look, much of it is an absolute mess. There are absolute gems of apps in there, but there are so many little horrible apps like the simple countdown timers, or simple calculators that cannot even match the default one delivered by your OS. And the huge amount of ‘sexy photos’ apps, that simply download a library of photos and show it to you. Those are no apps, it is just ‘Hello World’ development.

And everyone wants to strike it rich.

Which is absolutely fine actually. Don’t get me wrong, there is nothing wrong with this model. Because it allows some simple but absolutely gems of apps being discovered, and rise, and become something big that it also is going to be.

I also am not writing here that Instagram is not a good app. It is not an app for me, but that doesn’t take away the fact it might not be a good app at all. I just don’t get the valuation of the company, which is, more or less, only the product.

One thing that I have proved multiple times in the history of this blog it is that in the end, content or functionality is always the counting factor. Content or functionality, nothing in-between. Content or functionality are the two elements that are anything that eventually lead to an experience. Instagram has functionality, but only limited, and has no content.

Look, that Facebook pays $1bn for Instagram, in the end, it’s their money. Good luck, but it makes a weird thing for being a fair market, or a well-balanced market. But on the other end, since when is the world of business a fair one?

Let’s be honest here, if Mark Zuckerberg would pay me even a $100m for my productions or photo studio, I will sell out in a minute. Maybe my morale is worth less than Instagram, and Howard Stern and Oprah even…

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