Kevin Hart has heard the shady tale about the streaming industry that has rocked Hollywood since Netflix reported last week that it has lost subscribers in recent months.
But Mr. Hart, a prolific actor and comedian, didn’t buy it.
“There are so many different entities, there are so many different platforms, there are so many different places where the world of content just can’t fade away,” said Mr Hart in an interview from Belfast, Northern Ireland, where he is shooting a movie for Netflix. “If anything, it has now been amplified.”
Mr. Hart has a huge proponent who supports his thesis. On Tuesday, Hart’s media company, Heartbeat, said it had raised $100 million from Abry Partners, a Boston private equity firm. People familiar with the deal said Ibri is buying a 15 percent stake in Heartbeat, valuing the company at more than $650 million.
The deal makes Mr. Hart the latest entertainment businessman to take advantage of the private equity funds scattered all over Hollywood. In the past year, Reese Witherspoon, LeBron James, and Will Smith have sold stakes in their media businesses to companies looking to make money from a growing demand for content.
Ratings are up, partly thanks to companies’ interest. Hello Sunshine, the company founded by Mrs. Witherspoon, It was valued at nearly $1 billion In its deal with Candle Media, a new company backed by private equity firm Blackstone. Moonbug Entertainment, owner of the hit children’s show “CoComelon”, was estimated at nearly $3 billion in a deal with Candle Media.
Industry analyst Michael Nathanson said production deals with high-profile performers will become increasingly popular as streaming companies focus on profitability. He said media companies want the shows and movies that have the best chance of gaining new subscribers, and name recognition is a reliable way to do so.
“The only way to beat clutter is with quality or established brands,” Mr. Nathanson said.
Hartbeat is a new company focused on comedy and cultural content created from the merger of two companies associated with Mr. Hart: Laugh Out Loud, a digital comedy company built in 2016 as a subscription streaming service by film studio Lionsgate and Mr. Hart, and Heartbeat Productions, Mr. Hart’s production company.
Mr. Hart, who controls Heartbeat, is stepping down as CEO, but he will remain its chairman. He will be succeeded by Ty Randolph, who was the COO of both Laugh Out Loud and Hartbeat Productions. Hart’s longtime business partner Jeff Clanagan will be the company’s director of distribution, and Brian Smiley, Hartbeat Productions’ president of film and television, will be Hartbeat’s chief content officer.
NBCUniversal’s Peacock streaming service, which has a deal that gives it the first opportunity to buy Hartbeat-produced TV shows, will continue to be a minority investor in the combined company. Heartbeat executives will also own stock.
Abry Partners did not respond to a request for comment.
Ms Randolph said Hartbeat Productions and Laugh Out Loud were profitable before the merger but declined to give details. More than 50 percent of Hartbeat’s revenue will come from its studio arm, which has deals to produce shows for players like Peacock and Netflix. (Previous productions have included “Olympic Highlights,” a real-time show of the Summer Games, and “Parenthood,” a Netflix movie in which Mr. Hart appears as a grieving father.) The rest will come from a host of companies, such as content licensing work and brand consulting for companies. Including Procter & Gamble, Lyft and Sam’s Club.
Merger discussions began in earnest during a retreat in July in Los Cabos, Mexico, where about 60 employees of the two companies were identified after months of working remotely during the Covid-19 pandemic, Ms Randolph said. In a hotel suite near the beach, executives set up a structure for the merged company, which included a change of top leadership.
Mr. Hart predicted that competition between streaming services would lead to a market with many big players vying for subscribers, each offering premium content. He made a comparison with the sportswear industry, where established companies like Nike continue to grow. He said that as long as Heartbeat puts up good performances, he will continue.
“There will never be a time when people do not want to laugh, and they will not have to drop their shoulders and have fun,” said Mr. Hart.
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