AT&T and The Chernin Group, the media holding company founded by former News Corp. chief Peter Chernin (pictured), have formed a venture aimed at investing in and launching online video businesses and have committed to plow $500 million into the effort.
The strategy is to invest in ad- and subscription-based VOD channels as well as streaming services, they said.
The J.V. forms more than four months after The Chernin Group acquired a majority stake in Crunchyroll, a streaming video service that specializes in anime content. The company also has strategic investments in companies such as Fullscreen, Pandora, SoundCloud and Flipboard. The hook-up with AT&T also comes after Chernin reportedly made a $500 million bid for Hulu last March.
For AT&T, the venture is also coming together as it looks to keep up with other service providers that have developed and launched OTT services of their own amid successful ventures such as Netflix, which now has more than 35.6 million streaming subscribers in the U.S. On the service provider end, Comcast has developed a subscription-based multiscreen VOD service called Streampix, while Verizon Communications has teamed up on the launch of Redbox Instant by Verizon.
"AT&T and The Chernin Group are combining our skill sets to address the growing consumer demand for accessing content how and when they want it,” said John Stankey, chief strategy officer at AT&T, in a statement. “Combining our expertise in network infrastructure, mobile, broadband and video with The Chernin Group’s management and expertise in content, distribution, and monetization models in online video creates the opportunity for us to develop a compelling offering in the OTT space.”
“A critical part of The Chernin Group’s strategy has been our significant focus on the online video industry, and joining forces with AT&T only further underscores our strategic commitment in this area as operators, investors and programmers,” added Chernin, chairman and CEO of The Chernin Group. “Consumers are increasingly viewing video content on their phones, tablets, computers, game consoles and connected TVs on mobile and broadband networks. AT&T's massive reach on those platforms across mobile and broadband and their commitment to the online video space make them the perfect fit for this venture with us."