After a brief presentation from VC Tim Draper titled “Why I am Bullish on Investing in Media” (the usual reasons: disruption, the end of media monopolies, the continued shift online), at AlwaysOn OnMedia, a panel of VCs including Draper, Eric Hippeau (Fenwick & West), Jonathan Miller (Velocity), Drew Lipsher (Greycroft) and Rick Heitzmann (Pequot Ventures), drilled down into the opportunities they see in media. (Draper, by the way, was introduced as launching a media fund, though he didn’t go into any details on that in his presentation and had “no comment” when I pressed after the session.)

-- Opportunities in new media world: Not surprisingly, the VCs claim to see opportunities everywhere. Hippeau: “You have to look at areas where there’s a huge amount of disruption.” He mentioned news, specifically, which is “now a commodity.” Lipsher: Envisioning huge opportunities in music, but still looking for the investment to make. Draper: Distribution channels have completely changed.

-- Inflection points: Miller: video viewing has spiked since the writer’s strike: “This won’t be turned back...but we haven’t seen the real usage patterns emerge.” Online video viewing is still in the early days. Although there have been some middling hits, the online Seinfeld has yet to emerge. Heitzmann added that it’s important for an online Seinfeld to emerge, because it’s the kind of thing that big consumer brands will feel comfortable attaching their name to.

-- Capital efficiency: A constant theme of the discussion was the increased capital efficiency of the industry, as new content, particularly video is much cheaper to create than it used to be. This has advantages and disadvantages for VCs. Heitzmann: “Capital efficiency is changing...You can know with a small investment whether content will take off.” The downside: There may be less of a need for VC money. Later on Heitzmann mentioned LX.TV, which just sold to NBC for a reported $10 million. The company was bootstrapped and didn’t need to raise venture money. Still, companies and brands need resources that a VC can provide, such as the connections and the basic infrastructure of a company. Draper: “We are looking for something that’s going to be around 100 years from now… a quick, flash-in-the-pan blockbuster doesn’t interest us.” As such, investing in content is not about investing in a short clip, but about investing in the group that’s going to keep turning out hits one after another. Lipsher: if you put it out there cheaply enough ($3,000-$5,000 per short video) you can see what happens. In a portfolio of 100 shorts, a few of those will turn into something someone wants to buy. “Key is to understand the rights… Once Warner Bros. sells Seinfeld to NBC, they’re out of the game.” New content startups and their investors need to stay in the game.

Update: Jeff Jarvis has his own take on the session

Disclosure: Greycroft is an investor in our company