Machinima Wants Hollywood Studios as Partners or Investors

/ Jul 18, 2013


A month ago, multiple reports indicated that Machinima was looking to raise a massive round of financing (as high as $70 million) to launch a premium over-the-top video service, which would allow it to compete with the likes of Netflix, Amazon, and Hulu. The company believed then that it had the ability to create a lucrative business by offering high-quality, TV-like programming and making it available via an owned-and-operated platform that users could access across multiple devices.

That hasn’t changed, as a Reuters report from earlier today says Machinima is still looking to raise a massive money round, but now closer to $80 million.

Back then, I argued that if Machinima wanted to successfully follow through on its content ambitions and become a new Netflix or HBO, any money round it raises needs to include a major media company like Comcast or Time Warner. The reasoning is simple: if you plan on charging people to access your SVOD service, you better have content that they want to watch, and if it’s an subscription-based OTT service, are willing to pay for. There are large media companies with an abundance of IP that Machinima’s core audience of 18 to 34 year old “fanboys” recognize and already love.

It appears that there is similar thinking at Machinima. According to the Reuters report, Machinima is in talks with Hollywood studios including Time Warner’s Warner Bros. and Viacom’s Paramount Pictures to partner on TV-length programming or have them come on as investors.

Machinima has existing relationships with Warner Bros. and Paramount, having partnered with WB on the live-action “Mortal Kombat: Legacy” series and with Paramount on an upcoming Grand Theft Auto-style action series.

Machinima CEO Allen DeBevoise told Reuters that his company plans to license full-length 44-minute shows, which Reuters notes, is the average runtime of an hour-long TV episode.* In this scenario, the studios producing the programming that Machinima licenses would keep ownership over the shows, which would allow them to monetize by packaging them for distribution in international markets.

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