Jeffrey Katzenberg’s Next Act With WndrCo:
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Ex-CEO of DreamWorks Animation also reveals Netflix committed $1.5B to studio for original TV content

Jeffrey Katzenberg says he feels like he’s in his 20s again — starting a brand-new venture, WndrCo, built around media and technology.

The co-founder and former CEO of DreamWorks Animation, speaking at an event Thursday in New York hosted by Hearst, said it’s actually the sixth time he’s started over in his career, citing his CV at Paramount, Walt Disney Studios, DreamWorks SKG and DWA. “One of the things that has happened for me is that whatever came next was better than what I had before,” Katzenberg said. “You shouldn’t be fearful of starting over.”

WndrCo has raised nearly $600 million, according to an SEC filing earlier this year, and plans to raise more than $700 million, according to a source familiar with the company. Katzenberg started the venture after he left DreamWorks Animation last summer with the sale of the studio to Comcast, after mulling over what he would do if he were 25 years old again. (He’s 66.)

Katzenberg didn’t say exactly what the company plans to do with that cash. But he said the biggest opportunity he sees right now is creating “new TV” — content specifically built from the ground up for mobile screens.

“I believe there is going to be an enterprise 10 years from now that will be as big as the television business is today… but it’s going to be delivered to you in a mobile experience, in chapters,” said Katzenberg, who was interviewed by Hearst Magazines president David Carey.

In the Q&A, Katzenberg also revealed that Netflix, which first signed its deal for original content with DWA in 2013, had committed to spend $1.5 billion on the partnership that ultimately encompassed 15 TV series with a minimum of 78 episodes each.

“They made a bet on us nobody ever has done,” he said. “[Netflix chief content officer] Ted Sarandos made a billion and half commitment to DreamWorks kind of on faith… It was the biggest order in the history of the TV business, and it was gamechanging for DreamWorks.”

Today, though, Netflix’s posture has changed and they have adopted more “stressful” business practices, Katzenberg added. “They’ve really become the dominant content buyers, so it’s become a different business model for them.”

Netflix now is near top of the pyramid in terms of high-cost TV production, according to Katzenberg. For its priciest shows like “House of Cards” and “The Crown,” Netflix spends upwards of $200,000 per minute, or $10 million for a 45-minute episode, he said. Top primetime broadcast TV shows spend $100,000-$125,000 per minute, he estimated, while “Game of Thrones” can run into the neighborhood of $300,000 per minute.

Meanwhile, mobile video content today as it exists on YouTube costs an average of under $100 a minute to produce, Katzenberg claimed. And, he added, the only reason it’s even that much is because professionally produced music videos account for a good chunk of the content mix.

There’s a white-space opportunity between those two spheres, according to Katzenberg. He said a few companies have been successful at producing mobile-oriented original video for a few thousand dollars per minute — citing Vice Media, BuzzFeed and AwesomenessTV, which is majority-owned DreamWorks Animation. (Not coincidentally, as Katzenberg pointed out in deference to his hosts, Hearst has ownership stakes in all three.)

What if, he posited, “The Bachelor” were scripted and built to be watched in eight-minute chapters on a phone instead of in an hour-long format for TV? “My belief is if you offer something great, [consumers] will value it,” Katzenberg said.

Actually, AwesomenessTV was building something exactly around that concept in a joint venture with Verizon — code-named “Made for Mobile,” its mission was to develop premium, TV-quality content for smartphones. But following Katzenberg’s exit from DWA, the two companies earlier this year killed the division, which had been headed by former ABC exec Samie Falvey. Last week, AwesomenessTV founder and CEO Brian Robbins announced he would be leaving the company, but says he hasn’t made a decision about what he’s doing next.

TV built for mobile seems like an inevitability to Katzenberg, who pointed out that teens and young adults are just as happy to watch entertainment on their smartphones as on a big-screen HDTV. Worldwide, 3 billion people are carrying around devices that in just a few years have embedded technology to let them take incredible, professional-looking photographs. “Video is about to go through the same level and rate of innovation,” he predicted.

Investors certainly seem to have bought into the mobile-video vision of Snap, which executed a dramatically successful IPO Thursday that gives the Snapchat-app maker a valuation of around $34 billion. Asked to do word-association with Snapchat, Katzenberg responded: “Innovative, exciting, playful.”

About his new company’s name, pronounced “Wonder Co,” Katzenberg said in what seemed like a practiced quip, “I spent 20 some-odd years dreaming, now I’m full of wonder.” He then deadpanned: “We don’t have enough capital yet for vowels.”

On WndrCo’s SEC filing, the two other officers listed are Ann Daly, previously president of DreamWorks Animation, and Sujay Jaswa, the former CFO of Dropbox.

Prior to inking the $3.8 billion sale to Comcast, Katzenberg noted that he had no intentions of selling DreamWorks Animation. He’d been planning to take the company private and sign on as CEO for another 10 years. “I felt passing the baton to Comcast, particularly them in this moment in time, was going to be better for [DWA’s employees], better for the company and great for what we had created over those two decades,” he said.

In his professional life, Katzenberg said his overriding goal has always been to exceed the expectations of the customer. And he’s carried that ethos into his personal life. He and his wife, Marilyn, have been married for 44 years and he still tries to find ways of surprising her (he said her birthday is coming up and he wants something special in store). “I dare you to be married for 44 years and exceed anyone’s expectations,” Katzenberg said with a smile.

Katzenberg, who campaigned for Hillary Clinton, shied from weighing in on President Trump: “I’m just not sure what this presidency and administration means yet,” he said, before adding, “Can we go for an hour without saying the ‘T-word’?”

Carey asked Katzenberg his thoughts about the royal snafu at the Oscars this past Sunday, when “La La Land” was mistakenly announced as best-picture winner, whereas “Moonlight” was the rightful recipient. The error was traced to one of the PriceWaterhouseCoopers accountants managing the envelopes.

“That’s live TV,” Katzenberg said. He praised host Jimmy Kimmel as “incredibly on target” and said the telecast was beautifully produced — which unfortunately ended extremely awkwardly.

“As troubling as it must have been in the moment,” Katzenberg said, “I don’t think there’s been a more talked-about Oscars.”

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