The question of when to jump in to digital media investments is only partly answered by the Double Bubble analysis. The way to play these opportunities is also related to the market structure and to the venture's leverage or market power. Laid out in this post is one model that is a shorthand for the relative power of the industry structure vs. any particular venture. The various industry types can be simplified to a Rule of N, meaning how many likely winners emerge after the war of attrition in the early going. Like all such models, exceptions abound, but it does provide guidance for when to jump into a new venture based on likely resulting industry structure.
To summarize investment strategies:
Rule of 1 ventures: invest early, before the leader emerges. Use marketing to create the leader.
Rule of 2 ventures: invest late, often very late. Pick the leader.
Rule of 3 ventures: invest late. Pick #1 or #2, or get out.
Rule of 5 ventures: invest early, based on IP/hits and distribution scope.
Rule of 8 ventures: don't bother