Alibaba Group Holding Ltd. BABA 2.23% and all six major Hollywood studios are among the backers of a $1 billion fundraising round for mobile-video startup NewTV, part of entertainment veteran Jeffrey Katzenberg’s WndrCo LLC and a significant bet on new ways of making and distributing entertainment.
NewTV is the latest project for Mr. Katzenberg, who left DreamWorks Animation SKG Inc. after Comcast Corp.’s NBCUniversal bought it in 2016. 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.
Other investors include Goldman Sachs Group Inc., JPMorgan Chase & Co. and Madrone Capital Partners, an affiliate of the Walton family. 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 Inc.’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.
She added that Alibaba’s expertise in artificial intelligence and behavioral analytics could be helpful later on.
Although pricing hasn’t been decided, NewTV is currently planning two subscription offerings, one with ads and one without.
Ms. Whitman said NewTV’s launch is tentatively scheduled for late 2019.
“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, according to Mr. Katzenberg. NewTV programming could cost more than $100,000 a minute, about the same as network television.
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 oversees marketing, distribution and the service’s technology platform.
Ms. Whitman said the two veteran executives view working 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.”