Hollywood veteran Jeffrey Katzenberg is out to raise $2 billion for a TV start-up that would set a record for digital media financing.
The co-founder of DreamWorks Animation envisions a next-gen Netflix or HBO for mobile, delivering premium short-form programming in snack-size bites.
Branded as New TV, it could become the first launch of his WndrCo media, entertainment and technology investment and holding company, which is staffed by former employees of Dreamworks and Dropbox.
New TV’s lavish productions would cost $100,000 a minute and attract A-list talent as creators, producers, directors and actors. Katzenberg believes that talent won’t do 10-minute videos without compensation they’re accustomed to being paid.
“We’ve all grown up with this idea that content is king,” Katzenberg told The New York Times. “And I realized, it actually isn’t. Content is the king maker, it’s not the king. The king is the platform. HBO is the king. Netflix is the king. Spotify is the king.”
“This is literally a true moment in time here in which we’re going to create a new form, a new format, a new platform, new content and we’re going to supply that content and we’re going to let them,” (referring to the major networks) “grab what ultimately will be the biggest value here by owning the platform.”
According to the Times, Katzenberg and team have met with Apple, CBS, Disney, Google, Spotify and Verizon so far. Katzenberg sold DreamWorks Animation last year for $3.8 billion to Comcast, then created WndrCo, “a holding company… We acquire exceptional businesses in the digital media and software-as-a-service space, and leverage our partners’ expertise and relationships to help them hire talent, expand operations, and grow revenue.”
He is convinced that content—as it currently exists—is not the holy grail, and that a new format and business model needs to be developed. So the Hollywood mogul has raised $600 million in venture capital and he’s focused on mobile-friendly, bite-size videos lasting between five and seven minutes.
Think “Game of Thrones, game shows, reality shows, the news, talk shows,” he said on-stage at the Cannes Lions festival in June. “There ought to be a version rearchitected to be consumed in a different way… That’s the next big opportunity.”
He added that HBO, Showtime and Starz subscription channels’ original shows cost around $200,000 per minute, with HBO’s Game of Thrones at the top, costing around $300,000 per minute by comparison.
With 72 percent of all video worldwide now viewed on a mobile device (according to video platform provider Oooyala), Katzenberg said, “You have an installed base of one and a half billion people who watch 45 minutes of video on a smartphone every day. So this is where I say to you, ‘They’re drinking water. We’re going to give it to them in a bottle.’”
As for advertising, he said, “I would actually make the argument that one of the challenges for network TV has been that they’ve actually busted the form by asking people to watch 19 minutes of commercial time inside of 60 minutes. Thirty-two percent of your watch time is watching commercials.”
That said, his vision is to partner with existing TV networks on a platform that they invest in and create for.
He believes New TV is the necessary evolution of television and entertainment. As for behemoths like Apple, Facebook and YouTube playing in the space, “They’re not doing anything new or different or unique. It simply broadens the offering and it may broaden the destinations that you can go to, but in fact that fragmentation at some point is going to implode.”
When Mark Zuckerberg founded Facebook his first-round financing ask was $1 million. Travis Kalanick sought financing for Uber of $1.25 million. Reed Hastings of Netflix raised $2.2 million. Now Katzenberg’s $2 billion is the new ask in a highly competitive and fragmented world of instant gratification and 24/7 on-demand entertainment.
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