Jeffrey Katzenberg Raises $1 Billion for Short-Form Video VentureJeffrey Katzenberg has a billion to play with for his new short-form video platform.
His holding company, WndrCo, announced on Tuesday that it had raised $1 billion in its initial investment round, including funds from 10 American media companies and the Chinese technology giant Alibaba.
The money will go toward the executive’s dream of upending the entertainment industry with high-quality bite-size content intended for mobile devices. His company, NewTV — which is the working title — will try to set itself apart from the competition by making and distributing programs mere minutes in length.
Mr. Katzenberg, a onetime chairman of Walt Disney Studios and a founder of DreamWorks, hired Meg Whitman, the former chief executive of Hewlett-Packard and eBay, to run the show.
“She doesn’t like this, but I keep saying we’re two old dogs who have a new trick,” Mr. Katzenberg, 67, said in a phone interview, as Ms. Whitman laughed in the background.
Because of Mr. Katzenberg’s track record, which also included a stint as the head of production at Paramount Pictures, any move he makes is regarded seriously.
But Hollywood has remained skeptical in the year since he announced his venture. Several executives have argued that there is little evidence to support the notion that viewers are craving short programming. And beyond the initial hype, Mr. Katzenberg has been short on specifics.
But now the project is coming into focus. Mr. Katzenberg announced on Tuesday that 10 major studios have signed on as backers: the Walt Disney Company, Entertainment One, 21st Century Fox, ITV, Lionsgate, Metro Goldwyn Mayer, NBCUniversal, Sony Pictures Entertainment, Viacom and Warner Media.
Strategic partners include Goldman Sachs, JPMorgan Chase and Liberty Global. Ms. Whitman said the biggest investor was Madrone Capital Partners, which has connections to the Walton family of Walmart fame (the retail giant is not itself an investor).
And perhaps most intriguing: Mr. Katzenberg has managed to land an investment from Alibaba, although China has remained off limits for many media companies, including Netflix.
The $1 billion from investors allows NewTV to begin licensing original programs, particularly from the media companies that have come aboard. Mr. Katzenberg’s company will not own the content it streams for on-the-go viewing.
NewTV has also rented out a few floors at a co-working space in West Hollywood, Calif. There are seven people on staff, and Ms. Whitman said she expected that number to move past 200 by 2020. Neither Ms Whitman nor Mr. Katzenberg revealed a date for when NewTV will go live.
The streaming company will enter a crowded marketplace. Each passing year sets a record for the number of scripted shows, which will be around 500 this year, and tech giants are aggressively entering the fray, with Apple having earmarked well over $1 billion to create its own original programming for a planned 2019 rollout.
All that content may create overload. John Landgraf, the chief executive of the critically favored cable channel FX, said last week the “narrative exhaustion” experienced by viewers inundated with too much to watch.
Mr. Katzenberg insisted that his service, which will be available by subscription, is playing in a different arena. Rather than competing with Netflix or HBO, it will target viewers looking for quick-hit fare to help them pass the time when they are, for example, on the subway or waiting in line at Starbucks.
Higher production values will distinguish NewTV’s programming from the majority of video shorts that gain traction on YouTube, Mr. Katzenberg said. And he trusts that viewers will appreciate the difference.
Writers, producers and directors have been able to please their audiences, he added, but not so much in the area of shorter content.
“We keep coming up with new ways to exceed the expectation of our customers,” Mr. Katzenberg said, referring to the rise of cable, DVDs and streaming. “Except now, for the first time in history, we have a whole generation of customers that have a new consumption habit, with this thing called short-form content. And the professional enterprise of storytellers in Hollywood is nowhere near it.
“Customers are ahead of them for the first time,” he continued. “We’re going to try to chase and catch up with them. They’re doing something and we’re not a part of it. That’s a missed opportunity.”