Southern California angel investors proclaim: "content is no longer king"

When NBC said in late August it would pull its TV shows off of Apple's iTunes site over a pricing dispute, it brought the war between the tech industry and the entertainment industry back into the spotlight.

The war between producers of content and the owners of online distribution channels had first flared up when Viacom sued Google for $1 billion over the posting of its video clips to YouTube. 

The argument over who will have the upper hand in the age of Web video entertainment -- Silicon Valley or Hollywood and New York -- has been raging ever since.

As we told you in a story last month, the topic ignited a fierce debate among venture capitalists on a new-media panel of the NewTeeVee conference in San Francisco.

Now, we find out that the topic is a hot one for angel investors as well.

At a meeting of the angel investment group Keiretsu Forum in November, we caught up with the group's Southern California chapter president, Connie Koch, to ask her for the latest thinking of her members on the issue.

While the Southern California chapter, like its four Northern California counterparts still invests mostly in life sciences and technology, it's "beginning to look at digital media and Web 2.0 companies," Koch said.

It turns out that a group of her chapter's members had discussed the issue at length while attending the fall Digital Hollywood conference in Los Angeles. The group had even voted to decide what types of startups would make the best digital media investments -- distribution companies, content companies or consumer-facing companies.

The result, Koch says, was "distribution is king, content is no longer king."

In fact, producers of original content came in third in the voting, behind distribution startups and those focused on consumers.

We're not sure whether this means the sale of WallStrip to CBS for $5 million is a one-off, or whether content companies should be spending their time soliciting media companies rather than angel investors.

But one thing is certain, at Vator.tv, we'll continue to cover the war for you.