The giant fundraising comes more than a year before the venture, currently known as NewTV, expects to launch its subscription-based service to consumers.
NewTV plans to bring Hollywood’s multimillion-dollar production values, brand-name talent and franchises to a new standalone mobile app, delivering video in “bite-sized” chapters of up to 10 minutes each.
As much as $900m of the financing will go towards commissioning and licensing content from top Hollywood studios, many of whom are also investing in the company.
In a joint interview in Hollywood on Monday alongside Mr Katzenberg, former Walt Disney and DreamWorks executive, Ms Whitman said that raising such a large amount of capital upfront was necessary to create an “entirely new platform”.
While YouTube, Instagram and Snapchat have taught billions of consumers to watch short, ad-supported videos on their smartphones, technology companies have not invested enough in professionally produced content to justify a premium subscription service, the two executives argue.
“There is no library to go buy here,” said Ms Whitman. “We have to launch with a rich immersive site. Frankly, no one studio can do this on their own.”
As well as offering snappier shows more suited to the coffee shop than the sofa, NewTV will optimise its content for mobile viewing, in how it is filmed and how it is displayed on-screen.
Videos will come in both horizontal “landscape” mode, like traditional films and much of YouTube, and vertical “portrait” orientation, the format preferred by Snapchat and Instagram. NewTV will also offer quicker search and discovery than existing services.
“The viewing window is quite short,” said Ms Whitman. “You can’t spend eight minutes figuring out what you want to watch.”
Today, though, these ideas are mostly still concepts. NewTV — itself only a working title — has fewer than 10 employees, based out of a co-working space in Hollywood, and initial content production is only just getting under way.
Nonetheless, the project’s nascent stages of development did not deter investors including Madrone Capital Partners, Goldman Sachs and JPMorgan Chase, as well as Liberty Global and Alibaba, from buying into NewTV’s vision.
The lead investor in its $1bn round, Madrone Capital Partners, is an investment vehicle of Rob Walton, the son of Walmart founder Sam Walton. Silicon Valley-based Madrone is run by Greg Penner, Rob Walton’s son-in-law and successor as Walmart chairman.
“The trends are clear that mobile video consumption is where the growth is happening, and NewTV’s unique subscription platform, focused on premium, bite-sized content, is an exciting investment for Madrone Capital,” said Mr Penner in a statement.
However, despite NewTV’s pledge to bring together the best of Hollywood and Silicon Valley, tech companies such as Apple, Amazon, Facebook and Alphabet — all potential competitors to the venture that are heavily investing in professional content of their own — were absent from its list of new investors.
“We are a very unique and well-defined use case that is not competing with them,” said Mr Katzenberg.
Mr Katzenberg has achieved something of a coup by persuading all of the “big six” Hollywood studios to become investors and content partners in NewTV — a partnership he said was “without precedent”.
Disney and 21st Century Fox are investing ahead of their planned merger, alongside Comcast’s NBCUniversal, Sony Pictures Entertainment, AT&T’s Warner Media and Viacom, which owns Paramount Pictures. Lionsgate and MGM are also investing, as well as ITV and Entertainment One.
“If they don’t become your suppliers, if they don’t open up and give you access to that talent and to the IP, doing this wasn’t going to be successful,” said Mr Katzenberg.
Even with the big names lined up behind it, some in Hollywood remain sceptical that a new start-up can quickly reach the sort of scale needed for success and profitability.
But Rich Greenfield, media analyst at BTIG Research, said that nobody else was being as ambitious or aggressive in creating an entirely new kind of mobile video platform.
“It’s endemic to Jeffrey — go big or go home,” he said. “If the content is good enough, people will pay.”
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