AT&T, Chernin Group to Invest in Online Video22 Apr, 2014 By: Chris Tribbey
AT&T has partnered with independent media holding firm The Chernin Group (TCG) to acquire, invest in and launch new over-the-top (OTT) video services. The two companies have already committed a combined $500 million in the new venture.
Los Angeles-based TCG already has investments in several digital media companies, including Fullscreen, Crunchyroll, Pandora, SoundCloud, Flipboard, Scopely, MiTú, Base79, Medium and Tumblr.
”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 for 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 two companies also plan on investing in advertising and subscription VOD channels as well as streaming services.
“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 of TCG. “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."
Chernin is no stranger to digital entertainment. The former COO of News Corp. (now 21st Century Fox) was instrumental in guiding Rupert Murdoch's media assets into the digital age, including co-ownership of Hulu and the ill-time acquisition of MySpace. Chernin, which has a first-look movie production deal with Fox, in 2011 released Rise of Planet of the Apes, which grossed more than $480 million at the worldwide box office. Chernin Entertainment is currently producing the sequel, Dawn of the Planet of the Apes.
Last year, Chernin, which acquired majority interest in Crunchyroll anime service, attempted unsuccessfully to acquire Hulu.
AT&T says it has invested more than $119 billion in its infrastructure in the United States over the past six years to stay ahead of consumer demand for wireless and wireline broadband data consumption, noting that more than 50% of global Internet traffic is driven by video. AT&T currently has more than 110 million wireless subscribers and more than 16 million total broadband subscribers.