By Benjamin Din 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (August 8, 2018).

Alibaba Group Holding Ltd. and the six major Hollywood studios are participants in a $1 billion fundraising round for NewTV, entertainment veteran Jeffrey Katzenberg's mobile-video startup.

NewTV is the latest project for Mr. Katzenberg, who left DreamWorks Animation SKG Inc. after Comcast Corp.'s NBCUniversal bought the business in 2016. The startup, which is part of WndrCo LLC, marks a significant bet on new ways of making and distributing entertainment.

The goal is to create an app-based subscription service featuring high-quality programming specifically created for mobile devices -- usually in chunks 10 minutes or less. NewTV's launch is tentatively scheduled for late 2019.

Other investors in the initial round include Goldman Sachs Group Inc., JPMorgan Chase & Co. and Madrone Capital Partners, an affiliate of the Walton family of Walmart fame. The dollar figures of individual investments weren't disclosed.

The major studios involved are AT&T Inc.'s Warner Bros.; Walt Disney Co.; Viacom Inc.'s Paramount Pictures; 21st Century Fox's Twentieth Century Fox; Comcast's Universal Pictures; and Sony Corp.'s Sony Pictures.

NewTV will license some content from studios, which will retain ownership of such material, said NewTV Chief Executive Meg Whitman. Alibaba's expertise in artificial intelligence and behavioral analytics could be helpful later on, she said.

"No two studios or three studios could actually provide as much volume as we need, so quality is critical. But if you don't match that with quantity, it won't succeed," Mr. Katzenberg said. "Having the studios on board at the outset of this was essential."

Mr. Katzenberg noted the unprecedented boom in short-form videos on ad-supported platforms such as YouTube and Facebook. However, even material produced professionally for those sites is typically made on the cheap, for no more than a few thousand dollars a minute, he said. NewTV programming could cost more than $100,000 a minute, about the same as network television.

Although pricing hasn't been decided, NewTV is currently planning two subscription offerings, one with ads and one without.

In January, Mr. Katzenberg tapped Ms. Whitman, the former CEO of eBay Inc. and Hewlett Packard Enterprise Co., to lead NewTV. While Mr. Katzenberg focuses on content strategy, she will oversee marketing, distribution and the service's technology platform.

Ms. Whitman said the two veteran executives view working together in a startup as their "sweet spot."

"It's a perfect marriage, in some ways, of Hollywood and Silicon Valley, " she said. "We think it takes excellence in both of those to create what we're trying to create."

(END) Dow Jones Newswires

August 08, 2018 02:47 ET (06:47 GMT)