Jeffrey Katzenberg’s Netflix-meets-YouTube video service raises $1 billion

The Hollywood mogul has secured the capital he needs to launch his digital entertainment startup.

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Jeffrey Katzenberg has secured his first $1 billion in financing for his mobile video startup NewTV, which promises to deliver YouTube-length video clips made by A-list talent. Katzenberg, the DreamWorks cofounder and former CEO of DreamWorks Animation, announced NewTV last year as part of his new media company WndrCo, and has been steadily putting the pieces of the company together with characteristically splashy announcements. Earlier this year, former Hewlett Packard CEO Meg Whitman was named NewTV’s CEO.

The latest investment round, led by media companies like Warner Bros. and Disney, gets NewTV closer to the starting gate, and Katzenberg has been reportedly making the rounds in Hollywood, talking to directors and producers about creating content for the platform. The idea is to create a Netflix-like mobile service loaded with premium, episodic content. According to Bloomberg, each series would cost between $5 million and $6 million per hour. Each episode will be about 15 minutes long.

In essence, Katzenberg is marrying the Netflix and YouTube models in the hopes that viewers will be willing to pay for more polished video content on the go. Imagine being able to see short episodes of a series like Game of Thrones on your phone (an idea that has occurred to AT&T as well).

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Almost two decades ago, Katzenberg played with this idea when DreamWorks launched its short-lived, online startup Pop.com, which promised to feature content created by top Hollywood artists like Ron Howard and Katzenberg’s partner at the time, Steven Spielberg. In many ways, Pop.com was ahead of its time, launching more than five years before YouTube and well before widespread broadband and wireless. Today, no such roadblocks exist, and Katzenberg is seizing the opportunity to argue that short-form digital content need not be DIY.

Katzenberg is one of the few old-school entertainment moguls who has been able to successfully segue into the digital age—IAC chairman Barry Diller and Otter Media founder Peter Chernin are among the handful of others–and at DWA he made the savvy investment in the YouTube channel AwesomenessTV. Indeed, no one questions his ability to doggedly pursue his vision or his understanding of young audiences.

But there are still many questions surrounding NewTV, such as whether millennials that have been raised on Snapchat, Facebook, and YouTube actually do want highly produced videos—and more importantly, whether they’ll pay for it. YouTube has experimented with this with its subscription service YouTube Premium, but the company has never revealed how big its audience is.

Then there’s the issue of securing talent. Both Snapchat and Facebook have attempted to woo Hollywood players to make content for their platforms and have been met with meh levels of success, in part because of what they’ve been willing to pay (or rather, not pay). Katzenberg is planning on being more generous, but it will still mean convincing directors and actors to take fee cuts.

The price of a NewTV subscription also remains unknown, as well as where and how it will be distributed.

Then there’s Whitman, an accomplished business leader, but one who has never led an entertainment company nor who has any real experience in the youth market.

But for now, players are lining up to bet on Katzenberg. According to CNN, Katzenberg’s $1 billion war chest was made possible by Disney, 21st Century Fox, Warner Bros., Entertainment One, and other media companies, who collectively invested about $200 million. The rest of the funding has come from institutional investors in the U.S. and China.


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Author:  NICOLE LAPORTE
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Disney must offer to buy all of Sky even if Fox plans blocked

The ruling is the latest twist in the takeover saga which has already been held up due to separate competition concerns.

Britain’s Takeover Panel has ruled that Disney must offer to buy all of Sky if it succeeds in its planned purchase of the majority of 21st Century Fox.

It means that even if Fox’s plans to take over Sky are blocked as a result of an investigation by competition regulators, Disney would still have to offer Sky’s shareholders a deal at the same price of 1075p per share.

The decision from the Takeover Panel, which applies City rules on takeovers and mergers under a code designed to ensure shareholders are treated fairly, disagreed with Disney’s argument that it should not have to do so.

The panel’s supervisory role is distinct from the investigation into the Fox-Sky deal being carried out by the Competition and Markets Authority (CMA), which looks at wider issues.
Fox, which already holds a 39.1% stake in Sky, agreed at the end of 2016 to buy the remainder of the company in a deal valuing it at £18.5bn.

The CMA provisionally ruled in January that the takeover “may be expected” to act against the public interest because it would concentrate too much influence over the UK media industry in the hands of the Murdoch Family Trust (MFT).

The trust – the vehicle through which Rupert Murdoch, the executive chairman of 21st Century Fox, owns a controlling stake in that company – also has a controlling stake in News Corporation, owner of The Sun, the UK’s top-selling national newspaper, as well as The Times, The Sunday Times and the Wall Street Journal.

However, the CMA has suggested remedies for Sky and Fox to address these issues.
Meanwhile, last year Disney agreed to buy Fox’s entertainment assets including its stake in Sky, in a separate deal which is also subject to regulatory clearance.

However, Disney argued that if Fox’s attempt to buy the remainder of Sky were to be blocked, it should not be forced under takeover rules to try to do so itself.

Thursday’s announcement by the Takeover Panel disagreed with that assessment. The panel said Disney, Fox and Sky had accepted the ruling.


 

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Author Sky News

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