Raising $1 billion recently in the initial round of fundraising for his mobile-video startup NewTV, a network focusing exclusively on short form content for mobile consumption, Jeffrey Katzenberg is betting high on new ways of making and distributing entertainment.
The project, which is backed by Alibaba, AT&T Inc.’s Warner Bros.; Walt Disney Co.; Viacom Inc.’s Paramount Pictures; 21st Century Fox’s Twentieth Century Fox; Comcast’s Universal Pictures; and Sony Corp.’s Sony Pictures, aims to create an app-based subscription service featuring high-quality programming, usually in chunks 10 minutes or less, media reports said.
The other investors include Goldman Sachs Group Inc., JP Morgan Chase & Co. and Madrone Capital Partners.
Scheduled to be launched in 2019, NewTV will license some content from studios, which will retain ownership of such material, according to NewTV Chief Executive Meg Whitman, who is the former CEO of tech giant HP.
“No two studios or three studios could actually provide as much volume as we need, so quality is critical. But if you don’t match that with quantity, it won’t succeed,” Katzenberg said. “Having the studios on board at the outset of this was essential,” he added.
Katzenberg believes that despite an unprecedented boom in short-form videos on ad-supported platforms such as YouTube and Facebook, even professionally created content has been lacking quality.
NewTV, which is focussing on quality programming, may produce content which is about the same cost as network television.
It will be a mobile-first subscription video offering that will focus on premium original programming aimed at audiences in the 25-to-30 age range. It will also feature multiple price points, with one higher-priced option that doesn’t include advertising and a lower-priced tier that has limited ads.
Katzenberg, who left DreamWorks Animation SKG Inc. after Comcast Corp.’s NBC Universal bought it in 2016, had planned to build a premium video service, dubbed Made for Mobile, but the project never saw the light of the day though the idea remained with him since then.
For Whitman, it was an opportunity as media and entertainment grapple with declining pay TV subscriptions and the rise in streaming. “I’ve been in business where wind is in your face. I’ve been in business where wind is at your back. This is one of the ones where wind is at your back,” she told the media.