ITV PLC (LON:ITV) is among several firms investing in a new video streaming service for mobile phones that is being launched by DreamWorks Animation co-founder Jeffrey Katzenberg.
NewTV, the temporary name for the venture, has raised US$1bn from a number of backers including ITV, Walt Disney Co. (NYSE:DIS), 21st Century Fox (NASDAQ:FOXA), Lionsgate Entertainment Corp (NYSE:LGF), NBC Universal, Sony Pictures and Warner Media.
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Other investors include Chinese e-commerce giant Alibaba (NYSE:BABA), investment banks JP Morgan and Goldman Sachs (NYSE:GS), and investment fund Madrone Capital.
The new service comes as more and more customers use their smartphones to watch video content. Netflix has led the transformation of traditional TV viewing and now others in the entertainment industry are playing catch up.
Former Hewlett-Packard and eBay boss Meg Whitman to become CEO
NewTV is expected to be launched next year with former Hewlett-Packard and eBay boss Meg Whitman as chief executive.
“NewTV brings together the best of Silicon Valley and Hollywood to create the first entertainment platform built for easy, on-the-go mobile viewing,” Katzenberg and Whitman said in a statement.
The service will take advantage of the talent and intellectual property of its entertainment partners to create shows that will cost about US$15mln a season.
NewTV to rival Netflix
The aim is to make quality original programmes in the same way that Netflix does to attract viewers. It plans to start with two subscription options, one with advertising and one without.
“We are already seeing tremendous interest from Hollywood’s top talent,” said Katzenberg, whose DreamWorks has produced film hits such as Shrek.
Last year, Katzenberg said he had already spoken to household names including director JJ Abrams, actor Ron Howard and producer Jerry Bruckheimer.
Whitman added: “More so than ever, people want easy access to the highest-quality entertainment that fits perfectly into their busy, on-the-go lifestyles.”
In July, ITV’s chief executive Carolyn McCall told investors that talks were underway with a number of potential partners for a new subscription streaming service. ITV already has its Hub+, a pay for advert-free version of its on-demand service.