$1 Billion Raised By Startup ‘Newtv’, All Major US Studios Invest

A successful $1 billion seed-funding round for NewTV was raised by its holding company WndrCo, the company announced recently. The company is owned by Jeffrey Katzenberg and Meg Whitman who have been able to convince investors about their ambitions to develop a platform that would be the next generation of the likes of HBO or Netflix where bite-size original programming is being designed for smartphones.

The question however is now whether consumers would be ready to pay for its services.

Some of the names backing the startup include Disney, 21st Century Fox, NBCUniversal, Sony Pictures Entertainment, Viacom, AT&T’s WarnerMedia, Lionsgate, MGM, ITV and Entertainment One.

Alibaba is among the tech companies that have invested in the startup.

“Really, this allows us to launch our vision of bringing together the best of Hollywood and Silicon Valley,” said NewTV CEO Meg Whitman. Earlier this year, this former CEO of Hewlett Packard Enterprise and eBay was appointed to head the company.

Premium lineup of original, short-form series comprising episodes of 10 minutes each will form the content of NewTV which is being aimed to be launched by the end of 2019. According to Whitman, there would be two types of subscription for the service – an “advertising-light” option and an advertising-free plan.

According to Katzenberg, the former CEO of DreamWorks Animation, there is huge potential for a smartphone focused entertainment service given the fact that more and more videos are being watched by billions of smartphones users throughout the world. “We don’t consider this competitive with Hulu, or HBO, or Netflix, or the networks,” he said. “It’s a completely different use case.”

Katzenberg said that sitcoms, dramas, reality and documentaries would be part of a wide range of scripted and unscripted shows to be featured on NewTV. There would be no live shows. “For all the different formats of television, there are ways to innovate and adapt them into content you can conveniently watch in chapters on the go,” he said.

Partnering with traditional entertainment producers is the key to NewTV’s business model. The company would not produce any shows itself but would rather license programming.

“If you look at the job here of wanting to create a unique quality of content, we also need quantity — and the only way to achieve that quantity is by being able to get the resources, support and access of the big studios,” said Katzenberg. “From Day One, it was essential to have their support for this. We have built a licensed model that is highly, highly appealing to them.” NewTV also is looking to partner with telcos and others on distribution deals.

Mark Burnett, chairman of MGM’s Worldwide Television Group, is very hopeful about the fortunes of NewTV. “This is the right thing at the right time. People now watch most of their content on mobile — and this idea is amazing,” Burnett told Variety, adding, “If anybody can make it work, it’s Jeffrey Katzenberg.”

(Adapted from Variety.com)

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