Online video business has been growing rapidly in recent years and yesterday, the Chernin group and AT&T have announced the formation of a new venture to acquire, invest in and launch Over-The-Top (OTT) video services. This venture will benefit from both companies expertise, skills sets and strengths in many areas. The goal of this venture will be to invest in advertising (monetization) and subscription based Video On Demand (VOD) channels and streaming services.
Since consumer demand for OTT and VOD have been growing rapidly over the last few years, this venture will be taking advantage of this opportunity to create compelling content and offerings for consumers.
I am a cordcutter and have watched countless hours of videos mainly on my mobile device or tablet on AT&T’s high speed mobile broadband and I am stoked about announcement of this new venture.
Below is the press release from yesterday.
THE CHERNIN GROUP AND AT&T CREATE NEW VENTURE TO ACQUIRE, INVEST IN AND LAUNCH ONLINE VIDEO BUSINESSES
DALLAS and LOS ANGELES, April 22, 2014 — AT&T* and The Chernin Group, which manages and invests in media businesses around the world, today announced the formation of a venture to acquire, invest in and launch over-the-top (OTT) video services. The Chernin Group and AT&T have committed over $500 million in funding to the venture. Further financial terms of the transaction have not been disclosed.
This alliance positions AT&T and The Chernin Group to take advantage of the rapid growth of online video and OTT video services, with each party bringing significant and complementary strengths. The strategic goal of this initiative will be to invest in advertising and subscription VOD channels as well as streaming services.
”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. “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.”
The Chernin Group brings assets as well as expertise to the venture, including contribution of its majority stake in Crunchyroll, a leading subscription video on demand service.
“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,” said Peter Chernin, Chairman and CEO, 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.”
AT&T’s network resources bring enhanced opportunities for this new content alliance to create compelling offerings for consumers. AT&T has invested more than $119 billion in the United States over the last six years in part to stay ahead of the exploding consumer demand for wireless and wireline broadband data consumption, with more than 50% of global Internet traffic driven by video. AT&T has over 110 million wireless subscribers, more than 16 million total broadband subscribers, is a leader in connected devices and continues to win awards for its wireless and wireline services. J.D. Power awarded AT&T the “Highest Ranked Customer Service Performance Among Full-Service Wireless Providers” and “Highest Satisfaction with the Purchase Experience among Full-Service Wireless Providers” in their 2014, Volume 1 studies.1
*AT&T products and services are provided or offered by subsidiaries and affiliates of AT&T Inc. under the AT&T brand and not by AT&T Inc.
1 AT&T received the highest numerical score among full service wireless providers in the proprietary J.D. Power 2013 (Vol. 2) and 2014 (Vol. 1) Wireless Customer Care Full Service and Full Service Wireless Purchase Experience StudiesSM. Study based on 7,195 (Customer Care) and 8,525 (Purchase Experience) consumer responses measuring 4 full service wireless providers and measures opinions of consumers who purchased a wireless product or service within last 6 months. Proprietary study results are based on experiences and perceptions of consumers surveyed July-December 2013. Your experiences may vary. Visit jdpower.com.