SoftBank's Visionary Vice Chairman Makes His Mark3 Oct, 2014 By: Erik Gruenwedel
Nikesh Arora, head of SoftBank’s Internet and media unit, once advocated acquisitions of Netflix and LoveFilm
Masayoshi Son, founder and CEO of Japanese Internet conglomerate SoftBank, may get all the headlines spearheading the No. 3 Japanese wireless carrier’s acquisition of Sprint-Nextel last year and 32% stake in Alibaba, the Chinese Amazon-wannabe that just launched a successful IPO.
Yet in entertainment circles, SoftBank’s reportedly short-lived $3.2 billion acquisition interest in DreamWorks Animation, which transitioned into a separate $250 million investment in movie producer Legendary Entertainment (“The Hangover” and “The Dark Knight” franchises), is actually the work of Nikesh Arora, a former Google executive now CEO of SoftBank Internet and Media Inc., a subsidiary based in San Carlos, Calif.
With studios undergoing challenges at the box office, and media companies enduring declining network TV ratings as viewers increasingly opt for on-demand options, the time would appear right for well-heeled third parties to make their mark in Hollywood.
Enter Arora, who was born in India, has a masters degree from Northwestern and was once the highest-paid Google executive when he reportedly made $51 million in compensation. While at Google, Arora headed sales and marketing efforts — responsibilities that involved dealing with Hollywood.
Notably, in 2009 Arora pitched Google senior brass the idea of acquiring Netflix and LoveFilm — the latter subsequently bought by Amazon in 2011 and rebranded Amazon Prime Instant Video. Google executives reportedly nixed the ideas, preferring to allocate resources toward establishing subscription streaming with the search behemoth’s YouTube brand, according to Reuters, which cited personnel familiar with the meetings.
Of course Netflix is now a SVOD behemoth with 50 million global subscribers and growing, with Amazon Prime Instant Video attempting to keep up. Meanwhile, YouTube’s SVOD venture continues to be a work in progress with Google now advocating for original scripted programing instead of traditional user-generated videos.
“YouTube is a massive site for video viewing, but it doesn’t generate the amount of video advertising dollars that its traffic would suggest,” Shyam Patil, analyst at Wedbush Securities, told Fox Business. There’s a “big gap between traffic and monetization and that’s what they are trying to close.”
Arora subsequently left Google in 2012 to join SoftBank.
“[His] knowledge gleaned from his years at Google about the media community [make Arora] perfectly placed [at SoftBank],” Sir Martin Sorrell, CEO of the WPP ad agency, told Reuters.