Heavy.com Co-CEO David Carson Provides Insight into Heavy's Future
While the number might seem small to ears accustomed to the staggering numbers of the days past and despite dot-com entertainment sites disappearing, Heavy (www.heavy.com) announced the completion of a $3 million financing round led by Baystar last week. This round of financing reportedly brings the company's total funding up to $5 million. David Carson, Co-CEO of Heavy believes that this round of funding will allow the company to reach profitability by the fourth quarter of this year.
Another key to Heavy's continued ability to thrive is that the company has combined a professional services division, which creates and distributes targeted marketing and e-commerce services, with its online digital entertainment network. Heavy currently employees 41 people across both divisions.
Carson says that investors were initially skeptical of the business plan, but believes that it is the diversification that has allowed the company to maintain the interest of investors. The Heavy entertainment network is used to help create buzz and distribution among Gen-Y'ers for the companies that use Heavy's professional services division, adds Carson.
Much of the $3 million in funding will be used to help develop an offline presence for the Heavy network. According to Carson, the company is currently discussing a cable presence in conjunction with Cablevision. Heavy works with Cablevision to promote its MuchMusic USA channel, which is available on DirectTV and several cable systems.
A partnership between Heavy and Cablevision would tend to make sense, as Cablevision states on its Web site that it has built its success through, "television programming that seeks to build core constituent audiences through 'niche' programming." In addition to MuchMusic, Cablevision's subsidiary Rainbow Media Holdings owns American Movie Classics (AMC), The Independent Film Channel (IFC) and Bravo, among others.
While Carson points out that Heavy has struck online syndication deals with the likes of Warner Brothers online and UGO.com, it is no secret that the truly lucrative deals are offline at this point. Because the services division is profitable, boasting clients such as IBM e-business and Volkswagen, Carson states that the companies net burn rate is lower then the $400,000/month quoted in a recent Red Herring article, but declined to say specifically.
While Carson believes that this round of funding will take the company to profitability, he adds that, if the plans are expanded to encompass the launch of a full-on cable television station, the company will have to go back to the market for a much larger round. Carson is not in a hurry, though, stressing that success must be established over time.
"Nobody is going to give you a cable television station right off," adds Carson.
Heavy has also announced that David Pachter, former senior vice president, business development for Interactive Video Technologies (IVT), has been named president and COO effective immediately. David Carson and Simon Assaad will continue their roles as Heavy's co-CEOs, with Carson overseeing creative and Assaad continuing to drive distribution, sales and partnerships.
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