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Warner Bros. bidding for online video company DramaFever
MUMBAI: US media conglomerate Time Warner’s Warner Bros. studio is among multiple bidders for a majority stake in the online video company DramaFever.
A report in ‘Wall Street Journal’ noted that SoftBank’s financial adviser, the Raine Group, which also ran the sale process last fall, has been actively pitching DramaFever to both traditional media companies and online video upstarts over the last three months. SoftBank is seeking to retain a significant minority stake in the company.
When contacted by Variety, SoftBank replied “We are aware of the reports, but are not able to comment.”
Founded in 2009, DramaFever is best known as the place where young people – especially teenaged girls – go to get their dose of subtitled Korean soap operas and other TV shows and movies from around the world. The Hulu-like model includes both a free, ad-supported tier and premium subscription service. In the year leading up to its 2014 sale, it turned heads in the industry with its explosive growth, more than doubling its traffic to two million unique visitors per month, according to comScore.
The Wall Street Journal noted that at the same time, it developed a business of powering other media companies’ subscription video services, such as AMC Networks’ new horror service, Shudder. AMC Networks was one of a handful of DramaFever investors, including MK Capital, NALA Investments and YouTube co-founder Steve Chen, who were bought out with SoftBank’s purchase.
Under SoftBank,DramaFever’s traffic has dropped nearly by half, to 1.18 million unique visitors in May, according to comScore. The research firm does not measure viewing on streaming video players such as Rokus or Apple TVs, and it only captures some of the viewing that happens on mobile devices. In addition, people familiar with the matter say that DramaFever, much like Hulu, has been shifting its strategy more toward its subscription service.
DramaFever could help Warner Bros. power its own direct-to-consumer subscription video services. The company has been mulling such products, such as a children’s streaming video service that would include Warner Bros. characters like Looney Tunes, for some time, the Journal has previously reported.
Warner Bros. was one of the original bidders for DramaFever last fall, along with Barry Diller’s IAC/InterActiveCorp, which also owns Vimeo, according to people familiar with the matter. IAC was very close to landing its prize when SoftBank swooped in at the last minute and snapped it up, the people said.
The report goes on to note that the current sale process in part reflects the shifting priorities of Nikesh Arora, the former Google executive who led much of SoftBank’s acquisition efforts in Hollywood last fall but who has since been elevated to president and heir apparent to SoftBank chief executive Masayoshi Son.
The DramaFever sale also shows the limits of that dealmaking. DramaFever, which SoftBank purchased in October, was intended to function as part of a broader portfolio of content assets, most notably those led by DreamWorks Animation. SoftBank held acquisition talks for the studio, which then had a market value of about $2 billion, in late September, but the deal fell through, The Wall Street Journal reported at the time. SoftBank invested $250 million in Legendary Entertainment in the wake of those talks cooling.