Why isn't there more investment in new media startups?

As an occasional angel, I tend to avoid media production - it doesn't scale as well as one might like.

While it's not as flat as consulting (one hour's work gets sold once) the maximum leverage on one hour's work is a multiplier based on the distribution.

My view, as an outsider who has never raised money for a startup, but that watches the industry with a level of professional interest is that media startups aren't an obvious sell for investors. Why? Content. They need users and content to sell. So, Flickr is obvious, but random new content based startup, not so much. With tech startups, it's different - there's potential for value add to the bigger fish. An obvious sell-by date.

Because the "tech startups" can lift the best bits of content from the "media startups" under cover of "fair use" without having to pay any of the costs. As long as the law fosters, encourages and protects selective content-theft, it's senseless to back a business that intends to create new content.

Why back a team of creators when you can back 2 guys who can write a program that can lift the best information from their stories as well as everyone else's stories at near-zero cost?

I doubt VCs dislike media startups so much as they dislike making obviously bad decisions. If we lived in a legal environment that said the guys behind Reddit had to pay royalties to the stories they linked to, things would be very, very different.

Anyone out there trying to get a new media startup off the ground and raise money for it? I'm working on a tech startup and there seems to be a lot of interest in early stage tech. But new media doesn't appear to have the same appeal.

VCs don't like content businesses.