Mobile video startup NewTV has raised $1 billion in funding in an investment round led by Madrone Capital Partners, and joined by a variety of Hollywood studios including Disney, 21st Century Fox, NBCUniversal, Sony Pictures Entertainment and Lionsgate, as well as ITV, Alibaba Group and Liberty Global. The funding arrives roughly a year before the service, headed up by ex-Disney chairman Jeffrey Katzenberg and ex-eBay and HP CEO Meg Whitman, is expected to launch.
NewTV says it aims to bring high quality production values to “short-form, mobile oriented content”. The company plans to invest heavily in original series (around $900 million of this funding will be spent on commissioning and licensing content) with episodes to be around ten minutes long. The service will have both an ad-free and an ad-supported subscription tier.
The announcement comes at a time when some prominent short-form services have been collapsing — just last month Vivendi announced they are to shut down their Studio+ short-form subscription service which cost the company €48 million, whilst in the same month Verizon announced a $658 million writedown following the collapse of Oath’s Go90. However, the NewTV’s prospects are in all likelihood somewhat brighter considering the list of heavyweight investors.
Katzenberg and Whitman however believe that so far there hasn’t been enough quality short-form content available to entice users to pay for these kinds of services, and suggested that collaboration between multiple studios may be key to making the business model a success. “There is no library to go buy here,” said Whitman. “We have to launch with a rich immersive site. Frankly, no one studio can do this on their own.”
Whitman also believes that quicker search and discovery that that offered by similar services will be crucial to making NewTV work. “The viewing window is quite short,” she said. “You can’t spend eight minutes figuring out what you want to watch.”
Investors seem to agree that despite the struggles of other mobile-first premium video services, NewTV’s model is viable.
“NewTV is opening a significant growth opportunity for creators across Fox with an entirely new way of story-telling, designed to address the exploding market for mobile video consumption,” said 21st Century Fox’s president Peter Rice. Madrone Capital Partners’ founder Greg Penner meanwhile said that “the trends are clear that mobile video consumption is where the growth is happening, and NewTV’s unique subscription platform, focused on premium, bite-sized content, is an exciting investment for Madrone Capital”.
Much of this confidence seems placed in Katzenberg and Whitman themselves, with several investors referencing them in their statements of support. The two now have a significant way to go to flesh out the idea, with their company currently having less than ten employees, and content production only just beginning to get underway.