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Ryan Kavanaugh's Proxima Acquires Stake In Largest Independent Premium Video On Demand Platform, Row 8, Could This Be Another Industry Distribution Shift?

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Mar. 24 2023, Updated 12:46 p.m. ET

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While the exact terms of the transaction between Proxima Media and ROW8 have not been fully disclosed, Proxima acquired what both Proxima and ROW8 dubbed a “significant strategic stake” in ROW8 and formed a joint venture, 'Proxima 8'. The deal involves Proxima acquiring a significant stake in ROW8, marking a strategic investment that will facilitate the growth of both entities. By combining their strengths, the two companies plan on creating a unique platform, Proxima 8, which will revolutionize the way audiences experience cinema.

As the theatrical windows, PVOD, SVOD and PPV windows have been in flux it seems a day doesn’t go by that there isn’t speculation as to what the future of distribution will be.

It seems Kavanaugh and Row 8 have their own plans.

With the backing of Proxima Media and the expertise of Kavanaugh in the entertainment industry, ROW8 has a unique opportunity to redefine how movies are consumed and distributed. By catering to the preferences of today's younger audiences, the partnership aims to tap into the vast potential that lies within the influencer community and digital platforms.

Through the acquisition of a significant stake in ROW8, Proxima Media will be able to leverage the technology that ROW8 offers, further expanding its distribution capabilities, which includes its ability to geolocate and ring fence by proximity to specific theaters, perhaps sharing a stake with the closest participating theater. Additionally, the partnership will allow Proxima to reduce marketing costs while maximizing revenues on highly commercial genre-specific films. By focusing on distributing Proxima’s youth-focused genres and utilizing its social media influencer connections Proxima 8 aims to create a platform that caters to today's generation and their combined billions of followers.

Proxima’s Ryan Kavanaugh has had an impressive career in the entertainment industry and is marked by a series of achievements and a remarkable ability to stay ahead of the curve. Kavanaugh has consistently demonstrated foresight and innovation, resulting in numerous accomplishments that have had a significant impact on the way films and content are created, marketed, and distributed. Often times his moves were questioned, many times shunned, at first by the industry.

Kavanaugh first made a name for himself as being the chief architect for the structure that took Marvel from a toy licensing company into a full-fledged studio and launching the MCU. When asked Kavanaugh recalls “I was laughed out of every room for a year bankers would say Iron Man? no one knows Iron Man and Thor is a dead brand, or even no one outside of America will ever see Captain America. It wasn’t until Peter Hoffman and Michael Blum at Merril Lynch they got it the first second we pitched it, and immediately jumped aboard. Hollywood thought I was crazy said none of the marvel characters would ever work the best ones were used”.

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Kavanaugh is also responsible for doing a first-of-its-kind deal with Netflix creating the “SVOD Window”. “The press literally came out and basically said I had lost my mind instead of HBO or Showtime I had made a deal with a small mail order DVD distribution company. That small little DVD distribution company was Netflix. Kavanaugh was also among the first to architect the “foreign output distribution” structure, also was the first to enter the China film market before any other.

In 2005, Kavanaugh, then in his young 20s, shot the first co-production in China, Forbidden Kingdom, which ultimately paved the way for Kavanaugh to launch a studio in China and become the only studio to ever have a government-issued distribution license to distribute films in China. Kavanaugh also launched Rogue Sports, which he grew to become the second-largest sports agency in the US before selling to Ron Burkle as well as a Television business in 2008, the first company to bring all aspects of reality production in house, making it one of the largest players with over 20 shows across 30 networks, including such hit shows as Catfish. In 2010 when Kavanaugh joined the board of Major League Gaming and took ownership, once again “this time they for sure thought I had lost my rocker, I mean who was ever going to pay let alone watch other people play video games”.

In 2014, Kavanaugh gave the Variety Keynote at CES where he stated, “if the studios don’t change soon the customers will change it for them as they now have the ability to get it (content) where they want it, when they want it and how they want to pay for it”. He was awarded Variety’s Showman of the Year and Billion Dollar Producer, having produced and/or financed over 200 films that grossed over 20 billion dollars at the box office, and helped to shepherd some of the most successful franchises, making him the 25th highest-grossing producer of all time.

While Kavanaugh's resume is impressive and he has shown a keen understanding of the entertainment industry, he isn't without his failures as well. In 2015, after being the largest mini-major studio for almost a decade, Kavanaugh found himself head-to-head with some of the larger hedge fund “corporate raiders”. This, along with a default by Chinese owned ICBC bank, who was to fund 250 million to Relativity, led Kavanaugh to place Relativity in Chapter 11 Bankruptcy protection. The Chapter 11 process lasted over a year, and it seemed not a day went by that Kavanaugh wasn't the press's favorite ‘whipping boy’. But, despite the widespread belief that Kavanaugh would not be successful in acquiring it back out of Chapter 11 Bankruptcy, he ultimately was successful and bought it back in 2016. In 2017, Kavanaugh sold the company to UltraV, who, after Kavanaugh had stepped down, put it through a reorganization. Kavanaugh retains a stake in Relativity today, and the company was recently reported to be profitable and growing.

Kavanaugh, when asked about the Relativity bankruptcy said “Babe Ruth didn’t just hold the record of most home runs he also held the record of most strikeouts. When your swinging for the fences your gonna strike out sometimes, many times but the home runs are all that much more sweet”.

ROW8, the largest independent digital Premium Video On Demand (PVOD) movie platform, offers its customers access to a vast library of high-quality movies available to stream instantly on their favorite devices. With agreements in place with virtually every major studio, including Universal, Warner Bros., Disney, Fox, Lionsgate, MGM, and Paramount, ROW8 has quickly become a leader in the industry. The platform's recent merger with Rad, an innovative blockchain-based streaming platform, has further strengthened its position in the market.

Kavanaugh's current company, Proxima Media, recently completed production on a Bryce Hall, 50 Cent slasher thriller Skill House and is in pre-production on King Bach's Myles Ryder and Home School most recently Kavanaugh was a credited producer on Strangers 2, Hunter Killer and Den Of Thieves.

The investment from Proxima Media represents a significant opportunity for ROW8 to accelerate its growth and expand its footprint in the market. With Proxima's expertise in content creation and distribution, ROW8 can expect a broader range of content and enhanced distribution capabilities, leading to a more comprehensive and engaging offering for its customers.

The acquisition by Proxima, according to Kavanaugh, “allows us to give the influencer stars of our films a way, a destination a true community to send and interact with their fans and followers where they can really participate in the journey, not just watch the movie. It will be the first time there will be a two-way connection from fan to movie and movie to fan; it's not just a platform but a destination”.

“We approach each film as its own business as the world of distribution is changing before our very eyes, this partnership allows us to go the traditional route of theatrical followed up by or PPV and the normal channels or to do ‘day and date’ and even hybrids where the theaters would participate in part of a PVOD sale based on geolocation technology within Row8”.

Proxima's focus on horror, thriller, action, love stories, and American comedies, specifically targeting a younger audience, is a strategic move that will likely pay dividends. With Kavanaugh's extensive connections to the influencer community through being a co-founder of Triller, a social media app which has over 450 million registered users and was the only app to ever be number one in eighty countries at the same time, gives him a unique connection to the top influencers.

As the entertainment landscape continues to evolve, it is crucial for industry players to adapt and stay ahead of the curve. With Proxima 8, Kavanaugh and ROW8 have shown that they are willing to take risks and embrace change, positioning themselves at the forefront of this dynamic market. As the platform develops and matures, the impact of this partnership on the industry will undoubtedly be one to watch.

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