T - Streaming Is Reshaping Hollywood Story-telling
Shortly after Amazon Inc. (NASDAQ: AMZN) revealed it is purchasing the studio MGM Holdings Inc (OTC: MGMB) for $8.45 billion including debt, Reese Witherspoon’s media business, Hello Sunshine, has been sold to a firm backed by private-equity giant Blackstone Group Inc. with the goal to build an independent entertainment company for Hollywood’s streaming era. After having received several offers, including one from the tech titan itself Apple Inc (NASDAQ: AAPL), Hello Sunshine will be entrusted to former The Walt Disney Company (NYSE: DIS) executives, Kevin Mayer and Tom Staggs, who will be steering the media venture Blackstone is backing.
Scooping for content
With so many players having entered the streaming market that exploded during the pandemic, the demand for content is literally on fire. Streaming services, from Netflix Inc (NASDAQ: NFLX) itself to new services launched by traditional giants such as Disney are trying to feed their platforms with as much quality content as possible. For this reason, the two executives are on a hunt for content companies, scooping deals with other firms such as the media company co-founded by Will Smith and Jada Pinkett-Smith Westbrook Inc., as well as the film and TV production company co-founded by Ron Howard and Brian Grazer, Imagine Entertainment.
Hello Sunshine already has a solid record of Emmy nominations by producing HBO’s “Big Little Lies,” Hulu’s “Little Fires Everywhere” and Apple’s “The Morning Show.”
The deal
The two executives already run a special-purpose acquisition company, but the Blackstone-backed company that is yet to be named is entirely independent, with Hello Sunshine being its first acquisition. The terms of the deal were not disclosed, but according to CNBC, people familiar with the matter said it is valued around $900 million, with Blackstone purchasing shares from existing Hello Sunshine investors, including AT&T Inc (NYSE: T), spending more than $500 million in cash.
CEO Sarah Harden and founder Ms. Witherspoon will continue to oversee the company’s day-to-day operations as well as join the board of a yet to be named company. Some executives and investors, including Ms. Witherspoon, will roll over the remaining equity into ownership stakes into the new company that is being formed. With Blackstone’s support, Hello Sunshine will be able to produce more shows and films, which can only increase its attractiveness to streaming platforms.
Giving female story tellers a voice
Ms. Witherspoon, the actress and entrepreneur founded Hello Sunshine in 2016 to create content based on stories told by women for women, which are not that common in Hollywood. This deal will empower Hello Sunshine to tell more stories, to hire more female creators from all walks of life, as well as to showcase even more authors. After all, Kevin Mayer is the architect of Disney+ streaming service so it is reasonable to assume that Hello Sunshine is in good hands. Not only did he create Disney+ from the ground up, including key acquisitions such as BAMTech LLC, which provides the technological backbone for Disney’s streaming channel, but he has also overseen the acquisitions of Pixar Entertainment, Marvel Studios and Lucasfilm while at the house of Mouse. Mr. Mayer left Disney last May after theme-park chief Robert Iger have the CEO throne to Bob Chapek.
Using the power of social media
Hello Sunshine has been able to tune into what its audiences want through social media because Witherspoon actively engages with this community, particularly those that are part of Reese’s Book Club. These kinds of opportunities didn’t exist even years ago and all those Emmy nominations show that Ms Witherspoon did a great job.
This deal is the next step of Hello Sunshine’s mission to send a clear message from real female creators to the masses that women can be the heroes of their own story. In simple words, the success of Ms Witherspoon’s venture is an acknowledgement that women’s stories (told by women) matter. In a few words, the changes in streaming-driven Hollywood are having an extremely favorable impact on the business of content creation, giving a voice to all artists with stories worth telling.
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