Huffington Post Co-Founder Ken Lerer Wants You to Watch His Next Company
What do you do once you sell your digital media business for $315 million?
Start another digital media business!
Bedrocket plans on creating and investing in programming that could find a home on the Web or on traditional TV. But it’s really interested in all the new, content-hungry video outlets that sit somewhere between those two poles: Netflix, Apple and Google TV, Roku, mobile phones, tablets, etc.
“I think this is the next sweet spot,” Lerer says. “The distribution is all built out. It just needs to be filled with content. It’s absolutely identical to cable in the 80s.”
Joining Lerer are Brian Bedol, who built and sold two TV networks (Classic Sports Networks to Disney’s ESPN and College Sports Television to CBS), Patrick Keane, a former Google and CBS marketing executive who ran Associated Content for a year before selling it to Yahoo, and hedge fund manager Jim Pallotta.
Bedol will be Bedrocket’s CEO (his personal investment company is called Bedrock Ventures) and Keane will be president. Lerer will be chairman and says he “will be hands on for some period of time,” as he was in Huffington Post’s early years. He says Pallotta will be an “active investor.”
Bedol and Lerer aren’t ready to go into detail about their plans, other than that they intend to build slates of programming–you could call them “channels”, if you like–that they can sell to distributors. And that they likely won’t have programming in front of viewers until the end of the year. They won’t discuss the amount they’ve invested in Bedrocket.
But their basic premise makes sense: There’s a big–and growing–market for video, and it won’t be sated with TV reruns and dog-on-skateboard videos alone.
“We’re at the beginning of a new paradigm, and you’re going to see a generation of really valuable content properties come out of this,” Bedol says.
They’re not the first ones to think this, of course. But earlier incarnations of Web-only video studios have failed, in large part because Web advertising economics haven’t been able to support much in the way of new programming.
And networks like Keane’s former employer, who should be good at this stuff, haven’t done much more with new video beyond a few webisodes. That’s because they have a fundamental channel conflict: It’s hard for them to build up a real alternative to the broadcast and cable channels where they’re already making money.
But now Web ad dollars are getting big enough to support “real” programming–note that Google is out persuading Hollywood to build shows for YouTube. And subscription services like Netflix and Amazon are going to be in the market for new stuff to show their subscribers.
Lerer, who has been an active angel investor along with his son Ben, via their Lerer Ventures fund, still plans on raising a second fund this year. But he says BedRocket will be the startup that gets most of his time (Ben Lerer will also be working with Bedrocket in addition to Thrillist, his own newsletter startup).
“I know much more than I did 6 years ago,” he says. “I see this one much more clearly than I originally saw the Huffington Post. I think this one has a real business plan from day one.”