Spark Cap Looking At Entertainment Startups
Dow Jones Newswires, May 04, 2006
By Mark Boslet of DOW JONES NEWSWIRES
PALO ALTO, Calif. (Dow Jones)—The confluence of Hollywood and the Internet is recreating the film and television industries at lightning speed.
That merging is where Todd Dagres of Spark Capital is focusing most of the resources of a $260 million venture-capital fund he raised last July. “We seem to be in an area that’s pretty hot,“ acknowledges the general partner. “We’re kind of in a place you want to be.“
Hot means that the number of startups willing to show Boston-based Spark their business plan is up and their diversity has increased. Some startups have $20 million to $30 million in revenue in emerging markets. Others are just ideas.
Dagres, a former general partner at Battery Ventures, says the ones that interest him most are learning to deliver content - movies, television, music, animation, even home videos - over high-speed broadband lines to homes. Or they are developing content for videogames, or are rethinking how to deliver advertising to a world where consumers no longer tune in to regularly scheduled television shows. Consumers are going to pick their content “on-demand” over the Internet when they want to see it, postulates Dagres.
“The 30-second TV spot doesn’t work for on-demand content,“ he says.
The time for the transition seems right. In Hollywood, the major studios are starting to understand they need to adapt to the changes computer technology is bringing to their industry, Dagres says. And among consumers, all sorts of devices are capable of receiving content, including cellphones, personal digital assistants and laptop computers.
Spark has put money behind two companies hoping to mine the rapidly changing world of entertainment. In mid April, the firm joined former Walt Disney Co. (DIS) Chief Executive Michael Eisner, Time Warner Inc. (TWX) and Shelter Capital Partners to put $12.5 million into Veoh Networks Inc. of San Diego.
Veoh has technology to develop television-quality video over broadband lines to homes. Veoh will permit hundreds of thousands, it not millions, of channels to be created on the Internet addressing consumer interests, such as fly fishing, says Dagres. And the quality is good enough for a flat-screen TV, he adds.
Spark also led an $8 million round of funding early this year for The Platform, a Seattle company designing a system to deliver audio and video content online to all kinds of devices.
The company’s plan is to interest major broadcasters in its publishing system, Dagres says.
Because it’s a young firm, Spark doesn’t yet have a track record or performance statistics to cite.
(Mark Boslet is a special writer covering technology for Dow Jones Newswires.)
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