Softbank Corp. share price up, acquires online video streaming service DramaFever

SoftBank Corp. has agreed to buy DramaFever, an online video streaming service that provides mostly Korean and Spanish television shows and movies.

Tokyo-based SoftBank continues its buying spree of digital content in order to supply the networks it owns, like the U.S. Sprint Corp., which it purchased last year. So far the company has invested in 1 300 technology companies, including a 32% share stake in Alibaba Holding Ltd and a $250 million stake in Legendary Entertainment, the producer of “The Dark Knight.”

“It’s an acquisition to stock a wide variety of content and to distribute content in South Korea to the world through SoftBank’s infrastructure,” said Satoru Kikuchi for Bloomberg, an analyst at SMBC Nikko Securities Inc. “It’s unique content that will help SoftBank differentiate itself.”

With this purchase the Japanese telecoms company is targeting the younger audience born between 1981 and 2000, who, according to ComStore, spend a third of their screen time on devices different than a traditional TV set and are far more likely to subscribe to a digital video service.

DramaFever has a huge base of broadcasters to work with, 70 to be exact. The digital media said it often has the rights to content online exclusively on the same day or the day after airing.

In a statement, Nikesh Arora, vice chairman of SoftBank said: “In five short years since going live, DramaFever has built an impressive Internet-based streaming video business operating at scale, we look forward to helping them bring their highly popular video content to an even larger global audience.”

DramaFever claims to have a total viewership of 20 million unique monthly users. More than half of its US viewer base have graduated from college or graduate school, with a major part being women between the age of 18 to 24.

Softbank will most likely pursue further expansion as the company snatched Rajeev Misra, a former debt-trading executive at Deutsche Bank AG and UBS AG, who joined Fortress Investment Group LLC earlier this year. Mr. Misra now plans to relocate to either Silicon Valley or San Francisco, where he will focus on acquisitions for the Japanese telecoms company, said three people briefed on the matter.

Softbank Corp. gained 2.17% in Wednesdays trading session and closed at JPY7 026 in Tokyo, marking a one-year change of -2.96%. Days high was reached at JPY7 027, while day low hit JPY6 893. The company is valued at JPY8.435 trillion. According to the Financial Times, the 12 analysts offering 12-month price targets for Softbank Corp. have a median target of JPY9 800, with a high estimate of JPY11 400 and a low estimate of JPY7 800. The median estimate represents a 39.48% increase from the last price of JPY7 026.