Alibaba invests in DreamWorks co-founder’s venture to create short videos for smartphones
Alibaba Group Holding has joined a stellar list of Hollywood studios in a venture headed by DreamWorks SKG’s co-founder Jeffrey Katzenberg to create original programmes for smartphones, deepening the group’s forays into developing content for the fastest-growing digital medium.
Katzenberg, the former Walt Disney Studios chairman credited with reinvigorating the company’s live action and animation divisions, raised US$1 billion for his NewTV venture this week. Alibaba took part as a technology investor in the fundraising by the Los Angeles-based company, led by former Hewlett Packard chief executive Meg Whitman as CEO, according to a statement by Katzenberg’s holding company WndrCo, without divulging the invested amount.
“We are thrilled to partner with Jeffrey and Meg to explore the future of entertainment on mobile platforms,” said Joe Tsai, co-founder of Alibaba and chairman of the South China Morning Post. Alibaba owns the Post.
Katzenberg - the “K” in DreamWorks SKG - has often been credited with helping to revive animated features, with box office successes in franchises including Shrek, Kung Fu Panda, Madagascar and How to Train Your Dragon. His decade-long tenure as Disney Studio’s chairman also coincided with animation hits such as The Lion King, and Aladdin.
For Alibaba, the NewTV investment is an extension of its Hollywood relationships, where it already owns a stake in Amblin Partners venture established by Steven Spielberg, the “S” in DreamWorks SKG.
Alibaba’s investment in NewTV and the creation of such a platform highlights the shift towards mobile entertainment, as the use of smartphones become the norm in countries like the US and China. China has the world’s largest number of smartphone users at 717 million, more than three times that of the US, according to the China Internet Report, co-authored by the Post, Abacus News and 500 Startups.
The NewTV platform will be headed by Whitman, and aims to launch by the end of next year with a selection of original, short-form series with episodes that are just 10 minutes each, compared to the longer 40-minute episodes that many TV shows on platforms like Netflix and Hulu currently have.
Similar to existing on-demand entertainment services, NewTV will operate on a subscription format.
Other investors of the venture include Walt Disney Company, Warner Music Group, 21st Century Fox, NBC Universal, and Sony Pictures Entertainment.
The proliferation of smartphones and 4G mobile networks, coupled with the shorter attention span of users when they are on mobile devices means that short videos have thrived.
In the US, platforms like Instagram allow users to post minute-long videos in their posts and 15-second clips in their Instagram Stories, posts that disappear in 24 hours.
Chinese internet firm Bytedance has seen massive success with its Douyin app (known as Tik Tok internationally) both at home and abroad, where it became the most downloaded iPhone app earlier this year for its social videos that lets users upload clips accompanied by songs and special effects.
In recent years, Chinese internet giants have pumped billions into acquiring and producing content for their digital entertainment platforms.
Alibaba Pictures earlier this year said it is tying up with STX Entertainment to produce Steel Soldiers, a movie about sentient robot soldiers that fight alongside humans. The company is also the official marketing partner for the movie Mission: Impossible – Fallout in China.
Rival Tencent Holdings has also poured in billions, with Media Partners Asia estimating that Tencent spent some US$2 billion on content for its Tencent Video streaming platform. The Shenzhen-based giant, which is an investor in STX, has invested in as many as 51 entertainment companies, according to a Variety report.