Six months after Intervu forged a distribution relationship with CNN Corp., the San Diego-based media streaming company received $20 million from the cable newscaster in exchange for common stock and promotional commitments.
“CNN approached us on this transaction, and we thought it was a good opportunity to get some on-air advertising with someone that are working with,” said Chief Executive Harry Gruber. “We want to build a household name in the streaming space.”
CNN, through The CNN News Group, purchased 350,000 shares of Intervu, representing 2% of the company, for approximately $57.14 per share. As part of the deal, CNN will provide Intervu with three years of advertising opportunities on the network and its various affiliates. Intervu, in turn, will provide streaming services for all networks under the Turner Broadcasting System Inc. umbrella, including CNN, TNT and The Cartoon Network.
“We are always looking for ways to broaden our business ties,” said Monty Mullig, vice president at CNN. “CNN also has equity in WebMD and IDG.”
Intervu, which is 5% owned by NBC, has already committed nearly $10 million to a multi-media advertising campaign. Although the company is funded by some of its media customers, Gruber said Intervu is committed to fulfilling the streaming needs of all comers.
“It is critical that Intervu be seen as neutral territory,” he said. “We will not violate this approach as we make a push in this tremendously hot industry.”
Gruber added that the company is considering launching an early-stage venture capital fund to support complementary technologies.