Kevin Hart has been hearing about the apocalypse about the streaming industry rocking Hollywood since Netflix reported last week that it had lost subscribers in recent months.
But Mr. Hart, a famous actor and a famous comedian, did not buy it.
“There are so many different entities, so many different platforms, so many different places for the content world to die,” said Hart in an interview from Belfast, Northern Ireland, where he is filming. a movie for Netflix. “If anything, it’s amplified now.”
Mr. Hart has a large following supporting his point. On Tuesday, Mr. Hart’s media company, HartBeat, said it had raised $100 million from Abry Partners, a private equity firm in Boston. Abry is buying a 15% stake in HartBeat, people with knowledge of the deal said, valuing the company at more than $650 million.
The deal makes Mr. Hart the latest entertainment entrepreneur to tap into the private equity money that is spreading across Hollywood. Over the last year, Reese Witherspoon, LeBron James and Will Smith have all sold shares in their media businesses to companies looking to monetize growing content demand.
Valuations spiked in part thanks to interest from companies. Hello Sunshine, the company founded by Ms Witherspoon, is valued at nearly $1 billion in a deal with Candle Media, a new company backed by private equity firm Blackstone. Moonbug Entertainment, owner of the popular children’s show “CoComelon,” is valued at nearly $3 billion in a deal with Candle Media.
Michael Nathanson, an industry analyst, said production deals with prominent activists will become increasingly common as streamers focus on profits. Media companies want shows and movies that have the best chance of winning new subscribers, and name recognition is a reliable way to do that, he said.
“The only way you get through the clutter is with quality or established brands,” says Mr. Nathanson.
HartBeat is a new company focusing on comedy and culture created from the merger of two companies affiliated with Mr. Hart: Laugh Out Loud, a digital comedy company formed in 2016 as a streaming service subscribed to by Lionsgate and Mr. Hart, and HartBeat Productions, Hart’s production company.
Mr Hart, who controls HartBeat, will step down as its chief executive but will remain chairman of its board. He will be succeeded by Thai Randolph, who served as chief executive officer of both Laugh Out Loud and HartBeat Productions. Jeff Clanagan, Hart’s longtime business partner, will be the company’s chief distribution officer, and Bryan Smiley, president of film and television at HartBeat Productions, will be HartBeat’s chief content officer.
NBCUniversal’s Peacock streaming service, which has an agreement that gives it the first chance to buy TV shows HartBeat produces, will continue to be a minority investor in the combined company. HartBeat executives will also own shares.
Abry Partners did not respond to a request for comment.
Randolph said both HartBeat Productions and Laugh Out Loud were profitable before the merger, but declined to provide details. More than 50% of HartBeat’s revenue will come from its studio arm, which has contracts to produce shows for streamers like Peacock and Netflix. (Past productions include “Olympic Highlights,” the real-time TV show about the Summer Olympics, and “Fatherhood,” a Netflix series starring Hart as a grieving father.) The rest will come from hybrid businesses, such as content licensing and branding consulting that work for companies including Procter & Gamble, Lyft and Sam’s Club.
Discussions about the merger began in earnest in July at Los Cabos in Mexico, where about 60 employees from both companies were reunited after months of working together, Randolph said. away during the Covid-19 pandemic. In a hotel near the beach, executives outlined a structure for the combined company, including a reshuffle of the top management.
Mr. Hart predicts that competition between streaming services will lead to a market with a larger number of players vying for subscribers, each offering distinct content. He compared it to the sports apparel industry, where established companies like Nike continue to thrive. He said: “As long as HartBeat delivers good performances, it will last.
“There’s never going to be a time when people don’t want to laugh, don’t need to drop their shoulders and just have a good time,” said Mr. Hart.