Samsung Electronics is planning to spend several tens of millions of dollars to develop short-form video content for a new mobile product, according to a report from The Information.
The report, citing unnamed people Samsung talked to about its plans, said that there is no clear business model yet for the putative service, but that over time the company hopes to create media services that would cost customers a few dollars per month.
According to the report, the initiative is being overseen by John Pleasants, a veteran of the gaming industry who managed Disney's mobile services and gaming business before joining Samsung as executive vice president of media solutions in June.
A Samsung spokeswoman did not immediately have a comment on the report.
The report is another indication that Samsung wants to branch out beyond selling smartphones and tablets to be a purveyor of services and software to counter falling hardware prices. However, creating mobile-specific video offerings could prove very difficult, not least because of technology limitations in phones and wireless networks, but also because it's not something that is in Samsun's wheelhouse.
The report said Pleasants has had conversations with Hollywood talent agencies and has separately said he doesn't want Samsung to viewed as "dumb money." "No 'House of Cards,'" one person familiar with the effort said.
That series, created as an original series for Netflix (NASDAQ: NFLX), is the epitome of original video content created for non-traditional distribution. However, Netflix has invested significantly more than Samsung is reportedly planning to. Netflix's original content budget is around $400 million, below 10 percent of its stated content budget for 2014 of between $3 billion and $4 billion.
Samsung also has not had much success in creating its own branded content services. The company ditched its Samsung Media Hub earlier this year after attempting to emulate Apple's (NASDAQ: AAPL) iTunes. Samsung also reportedly received pressure from partner Google (NASDAQ: GOOG), which did not want Samsung replicating the offers from its own Play media store. More recently, Samsung partnered with basketball star LeBron James on an app for Galaxy smartphone owners.
As CNET notes, Samsung is not the only company besides Netflix and Hulu creating content or chasing partnerships with content companies for video offerings. AOL, Yahoo, Microsoft (NASDAQ: MSFT), Sony, SoftBank, AT&T and Xiaomi all have been engaging in such efforts to varying degrees.
For more:
- see this The Information article (sub. req.)
- see this CNET article
- see this Engadget article
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