What have we here, is that Go90’s reincarnation or is someone cruelly teasing the failed Verizon video venture? In actual fact it turns out to be US businessman, film producer and almost-billionaire Jeffrey Katzenburg who reckons he has the answer to all TV’s problems with a short-form mobile-first streaming service called NewTV. Sound familiar?
Even 116 million mobile subscribers proved incapable of providing a platform strong enough to persuade viewers away from YouTube and social media where short-form content is king, but Katzenburg’s holding company WndrCo has just secured a $1 billion seed funding round and convinced some major names, who should probably know better, to invest.
These include Disney, 21st Century Fox, NBCUniversal, Liberty Global, Alibaba, Sony Pictures Entertainment, WarnerMedia (AT&T), Lionsgate, MGM, ITV, Entertainment One, Goldman Sachs, JP Morgan Chase and funding round leader Madrone Capital Partners.
With such a star-studded roster of investors we can’t blame the mainstream media for going into meltdown, expecting the next golden era of OTT video to be forged from the cash of some of the industry’s greatest names. We’d love to know how many similar ventures each of these companies has funneled cash into.
NewTV aims to launch by the end of 2019 as a two-tier Hulu-esque offering, available as ad-free and ad-light, planning to lure subscribers away from free short-form video platforms with the sheer quality of its premium content, according to Katzenburg.
Granted, the former Disney Studios Chairman has just raised $1 billion but such outlandish comments well over a year prior to launch is just asking for trouble. Katzenburg’s assertions should have deterred investors not swayed them, or perhaps he genuinely does have some magic up his sleeve, as people familiar with the man himself are leading the media to believe. In all seriousness, the voice of reason we at Faultline Online Reporter wield would love to be proven wrong – although his comments are not too far removed from the “Netflix killer” service launches hitting headlines on a weekly basis. And we all know how those fairy tales end.
“Even though there was all the television in the world in the 1990s, it was all free, all available – tens of millions of people went to HBO because what it offered was exceptional. We believe what you have in short-form today, we are delivering in new form. We believe the delta, the exceptionalness, will be as great,” Katzenburg said in an interview with CNBC.
Katzenburg will be the content lead for NewTV and if his content selections are as garbled as his press interviews then the service will enjoy an even shorter lifespan than Go90, which officially closed last week after less than three years in the field. But where Go90 was more blatantly targeting a millennial audience with a free, ad-supported service, NewTV is trying to come across as a more mature version – yet both are fundamentally targeting the same audiences currently hooked to video content from social media on smartphones.
The idea of “new form” has not been fully explained but we believe NewTV is betting on 5G to play a fundamental part in the launch, which would help explain the lengthy wait for NewTV’s debut as it relies on network roll-outs. This conclusion comes following a comment from former Hewlett Packard Enterprises CEO Meg Whitman, who noted Alibaba’s technological involvement will be dependent on 5G deployments.
“Think about what 5G will be able to do in terms of display, sound and instant discovery. We think that’s another element of the wind at our back in the venture,” said Whitman, talking about the pre-standard network technology. Whitman will serve as a yet unconfirmed executive somewhere in the vague realm of “business and technology” at NewTV.
NewTV will be an on-demand only offering, showing dramas, reality series, sitcoms and documentaries but apparently isn’t interested in getting into the original content business just yet. That might be wise considering Go90’s attempts at breaking into original programming went up (or down) in flames.
Hats off to Katzenburg for successfully roping in so many major investors, for a service in which the entire underlying concept is about optimizing content for the smartphone – which is bang on trend – yet removing the thin veil from this week’s outlined plans reveals NewTV is neither new nor innovative. Luckily for investors, there is plenty of time to change that.
“Literally less than 10% of Netflix’s viewing and less than 10% of Hulu’s viewing is actually mobile. It’s not optimized either. If we are right and it’s successful, others will follow,” said Katzenburg, apparently forgetting that Netflix recently re-encoded its entire content library into AV1 – the royalty free codec expected to become the de facto mobile streaming technology.