WPP may have found its next Buddy Media. The holding company's stake in the social marketing company earned WPP $62 million after selling to Salesforce last year. Now its digital investment arm WPP Digital has taken a stake in digital video network Fullscreen, whose CEO and founder George Strompolos described it as "one part a new media company with a massive creator network but also essentially Buddy Media for YouTube."
Former News Corp. president and COO Peter Chernin's The Chernin Group led Fullscreen's funding round -- adding to the group's early 2012 seed-stage investment -- and was joined by WPP Digital and Comcast Ventures, the investment arms of their parent companies.
Mr. Strompolos declined to disclose specifically how much funding Fullscreen has taken on with this round, but people familiar with the matter said it was in the ballpark of $30 million. All Things D had reported in April that Fullscreen was closing a $30 million round but only named The Chernin Group and Comcast Ventures as investors, suggesting that WPP's stake is relatively small and in line holding companies' typical minor strategic investments like the $5 million put into Buddy Media. WPP had previously invested in addressable TV advertising company Invidi and TV ad analytics firm Ace Metrix.
For holding companies and the companies in which they invest, those financial relationships can lead to closer business arrangements -- like Buddy Media developing products specifically for WPP's clients -- but Mr. Strompolos declined to discuss any formal arrangements. "There's nothing to announce and definitely nothing exclusive [with WPP]," he said. WPP executives were unavailable for comment. Nonetheless WPP will have an early look at Fullscreen's plans and conceivably be able to organize sponsorship deals or other brand integrations with Fullscreen's content creators. As part of the funding round, WPP SVP-corporate development Lance Maerov will join Fullscreen's board, along with Chernin Group president Jesse Jacobs and Comcast Ventures partner Sam Landman.
Launched in January 2011, Los Angeles-based Fullscreen started out as a network helping video creators including NBCUniversal and Fox and brands such as McDonald's and General Electric manage more than 10,000 Youtube channels that in aggregate notch 2.5 billion video views each month and span more than 150 million subscribers. While profitable in its current incarnation -- staffing 160 employees with additional offices in New York and Atlanta -- Mr. Strompolos aims to solidify his company's position as a media company, and that means a deeper investment in creating original content.
"The focus on the network piece of the business has worked for us and allowed us to build a profitable company, but great media companies have to be producers and owners of great content," he said.
Mr. Strompolos declined to say how many creators he plans to work with in developing original shows or how many series, but mentioned that Fullscreen has "done some of that experimentation quietly behind the scenes. It will be a process we develop over time, not a slate of 50 shows out the gate." He'll be looking to existing partners like Ryan Seacrest Productions to help identify new talent as well as Fullscreen's existing network of filmmakers, he said. The company is already working with filmmaker Devin Super Tramp, known for mashing up music videos and extreme stunts into videos with titles like "Human Slingshot Slip and Slide," on an original program (working title "Stunters").
"We have the ability to mine data within the network to see what's working, what the audience wants more of and invest greater resources into developing the best formats, talent and [intellectual property] not only for their value on YouTube but on multiple platforms," Mr. Strompolos said.
Distributing Fullscreen's content elsewhere may seem to support recent calls by producers for an alternative to YouTube. Prior to founding Fullscreen, he managed strategic partnerships at YouTube and co-created the YouTube Partner Program. But he doesn't look at it as getting content away from YouTube -- nor does he plan to do so -- but instead finding other ways to distribute content and grow audiences and revenues, such as through smartphone and tablet apps and connected TVs.
"We hired [as SVP-engineering] Timothy Mohn, the co-creator of HBO Go, which gives a little indication of what we're planning for Fullscreen," said Mr. Strompolos.