Kevin Hart has heard about the streaming industry that has been rocking Hollywood since Netflix reported last week that it had lost subscribers in recent months.
But Mr. Hart, the prolific actor and stand-up comedian, isn’t taking it.
“There are too many different entities, there are too many different platforms, there are too many different places for the world of content to die out,” said Mr. Hart in an interview from Belfast, Northern Ireland, where he is shooting a movie for Netflix. “If anything, it’s now amplified.”
Mr. Hart has a major funder who supports his dissertation. 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 percent 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 take advantage of the private equity money that is spreading across Hollywood. In the past year, Reese Witherspoon, LeBron James and Will Smith have all sold shares in their media companies to companies looking to capitalize on increased content demand.
Thanks in part to the interest of the companies, valuations have risen enormously. Hello Sunshine, the company founded by Ms. Witherspoon, was valued at nearly $1 billion in its deal with Candle Media, a new company backed by private equity firm Blackstone. Moonbug Entertainment, owner of the popular children’s show “CoComelon”, was valued at nearly $3 billion in a deal with Candle Media.
Michael Nathanson, an industry analyst, said production deals with prominent artists would become more common as streamers focus on profitability. Media companies want shows and movies that are most likely to gain new subscribers, and branding is a reliable way to do that, he said.
“The only way to break through the clutter is through quality brands or established brands,” said Mr. Nathanson.
HartBeat is a new company focused on comedy and cultural content that was formed from the merger of two companies affiliated with Mr. Hart: Laugh Out Loud, a digital comedy company founded in 2016 as a subscription streaming service by the Lionsgate movie studio and Mr. Hart, and HartBeat Productions, the production company of Mr. Heart.
Mr. Hart, who is in charge of HartBeat, will step down as CEO, but will remain chairman of the board. He will be succeeded by Thai Randolph, who was the chief operating officer of both Laugh Out Loud and HartBeat Productions. Jeff Clanagan, Mr. Hart’s longtime business partner, will become the company’s chief distribution officer, and Bryan Smiley, the president of film and TV at HartBeat Productions, will become HartBeat’s chief content officer.
NBCUniversal’s Peacock streaming service, which has a deal giving it its first chance to buy TV shows that HartBeat produces, will remain a minority investor in the combined company. HartBeat executives will also own shares.
Abry Partners did not respond to a request for comment.
Ms. Randolph said that both HartBeat Productions and Laugh Out Loud were profitable before the merger, but declined to provide details. More than 50 percent of HartBeat’s revenue will come from the studio arm, which has deals to produce shows for streamers like Peacock and Netflix. (Previous productions include “Olympic Highlights,” a real-time broadcast of the Summer Games, and “Fatherhood,” a Netflix movie starring Mr. Hart as a grieving father.) The rest comes from a combination of companies, such as content licensing and brand consulting work. for companies like Procter & Gamble, Lyft and Sam’s Club.
Merger talks kicked off in earnest during a July retreat in Mexico’s Los Cabos, where about 60 employees from both companies reacquainted themselves after months of working remotely during the Covid-19 pandemic, Ms Randolph said. In a hotel suite near the beach, executives worked out structure for the combined company, including a reshuffle of senior leadership.
Mr. Hart predicted that competition between streaming services would result in a market with several larger players competing for subscribers, each offering their own content. He compared it to the sportswear industry, where established companies such as Nike continue to grow. As long as HartBeat delivers good shows, it will continue to exist, he said.
“There will never be a time when people don’t want to smile, drop their shoulders and just have a good time,” said Mr. Heart.
