With media emerging as the big potential of the future, media companies have been making sure that they have enough cash to make acquisitions. Acquire, merge, survive and grow has been the mantra for quite some time for all the media companies in the world. National borders are hardly a bother.

In fact, the scene is so promising that the promoters are fired with new courage and enthusiasm. Film studio Artisan Entertainment, which is planning to go public this fall, formed recently a $50 million venture capital fund.

Media outfits are losing no time in funding new ventures or forming new alignments with existing players. Star TV is reported to have taken a 35-37 per cent stake in Pacific Internet for an India related narrow band Internet venture.

Here you see the marriage of entertainment and Net-based service. This is the way of the future. Investments are being identified in the online media sector. It is not only the media companies in addition to traditional venture capitalists who are in the field. The independent investors are not lagging behind. They include Liberty Digital Frank Biondi's WaterView Advisors. Biondi is the ex-chairman and chief executive of HBO, ex-president and chief executive of Viacom and ex-head of Universal Studios.

The Santa Monica-based Artisan, which produced and distributed the hugely profitable Blair Witch Project resorted to traditional venture capital firms to raise the majority of the money for its fund. The fund was dubbed iArtisan. Audax Ventures, a unit of Arisan's largest shareholder, Audax group contributed $35 million, alongside the private equity shop, Grove Street Advisors. Some undisclosed investors too chipped in.

Artisan will have the responsibility of managing and directing the investments. It will also be empowered to work with start-up companies in exchange for equity stakes.

Funding investment could run from $2 million to $5 million for the first three rounds of funding, according to Nicolas van Dyk, president of Artisan Digital Media, which oversees the fund. Media is the focus and speciality for fund managers who have their roots in this business. Is it any surprise that Artisan is seeking out companies with technologies that allow films and other types of programming to be created and delivered over the Internet?

The technology could span the area of infrastructure, digital rights management, content creation tools, streaming and compression and hosting.

The evolving model of funding is interesting in the sense that the front runner is the media companies who see the potential in the domain of their expertise. And when these firms do not have enough cash to fund it themselves, it is quite easy for them to convince venture capital firms for capitalising.

Artisan is in fact essaying out a new business model out there. Its own revenues are limited, $389 million for the fiscal year 1999. It has to be competing with giants like Bertelsmann, with a revenue of $13.7 billion, Time Warner with $27.3 billion and News Corp. with $14.2 billion. These giants have been reaping the benefits of increased ad revenues and had plenty of cash floating around for investment.

News Corp. set up last year e-partners, a $300 million equity fund, and Time Warner started a $500 million digital-media investment fund. In Europe, eBertelsmann is targeting to become the largest fund in Europe . It works in tandem with the company's existing venture activities: Some of the big players however have not jumped into this fray. They include Seagram, Walt Disney, and Viacom.