AT&T, Chernin Group form OTT joint venture
Michelle Clancy | 23-04-2014
AT&T and The Chernin Group have formed a joint venture to acquire, invest in and launch over-the-top (OTT) video services. The two have committed more than $500 million in funding to the venture. Further financial terms of the transaction have not been disclosed.
The strategic goal of the initiative will be to invest in advertising and subscription video-on-demand (SVOD) channels as well as streaming services. AT&T said that it would also bring its wireline and wireless network resources to the alliance, paving the way for additional revenue via the broadband needed to ensure a good video quality of experience.
"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 monetisation 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 the contribution of its majority stake in Crunchyroll, a leading SVOD 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 at 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."