MGM Leads $18.2 Million Investment in Video Start-Up Interlude

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The studio’s funding of Interlude, a company leading the development of interactive online video, follows their partnership to create a series based hacker film classic “WarGames”

MGM led an $18.2 million round of investment in Interlude, an Israeli start-up leading development of interactive online video.

MGM chairman and CEO Gary Barber also joined Interlude’s board as observer.

The investment, along with several others MGM has made in digital companies recently, turns the studio into the latest Hollywood player taking a financial interest in technology companies while they’re still emerging. After exiting bankruptcy protection in 2010, MGM joined a round of funding earlier this month in TubiTV, a movie- and TV-streaming app, and it invested in Iflix, a Southeast Asian internet-television subscription service, in August.

Interlude’s third round of funding increases its total amount raised to more than $36 million. In an interview with TheWrap, the company declined to specify its valuation based on the new round. Interlude’s technology helps filmmakers, music artists and brands crafts interactive online videos.

The company’s tech first rose to popular prominence two years ago with a video revival of Bob Dylan‘s classic “Like a Rolling Stone,” which allowed viewers to channel surf between among 16 channels of different actors and reality-TV stars lip-syncing lyrics.

With the money, Interlude plans to expand into creating serialized video crossing genres like drama, comedy, news, sports and pop culture.

Co-founder and CEO Yoni Bloch said in an interview that Interlude’s aspiration was always to tell larger-scale stories. “We grew into the place where we can finally start delivering on that,” he said.

Episodic content is a new pursuit for Interlude, which has partnered with MGM to develop a series based on the 1983 film “WarGames.” In the film, a hacker played by Matthew Broderick believes he’s playing a video game but unwittingly runs Cold War simulations on a military supercomputer, sparking a nuclear scare. The new series plays out almost like a game based on that premise, with new levels as new episodes and with the viewer able to make choices for the protagonist that change the dynamic of the story.

With the investment, the company also aims to amass more creators using its platform as well as enhance the technology around its format of interactive videos.

Joining MGM in the latest round are Warner Music Group, which has been an Interlude partner for more than a year; Samsung, whose investment was previously disclosed last month; and returning investors such as Sequoia Capital, Intel Capital and others.

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