By Sahil Patel
Just because The Chernin Group and AT&T lost out on their bid to buy Hulu — a company that Peter Chernin was instrumental in launching — doesn’t mean they’re going to remain idle.
The two organizations are forming and funding a new joint venture, which will focus on acquiring, investing in, and launching various over-the-top video services. To pursue such deals, TCG and AT&T have committed more than $500 million, with an eye toward bringing both ad-supported and subscription VOD channels and streaming services into the portfolio.
Additional financial details of the agreement were not disclosed.
“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.”
As part of the deal, TCG is contributing its stake in Crunchyroll, an SVOD service focusing on anime and Asian programming, to the venture. TCG had acquired a controlling stake in Crunchyroll last December, with plans to use the service as a starting point to launch video platforms for multiple content verticals. Since then, Crunchyroll has helped launch KDrama, an SVOD service for Korean programming.
“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 Peter Chernin in a statement. “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.”
If you recall, when The Chernin Group was trying to buy Hulu, it had pledged $500 million to the cause in partnership with AT&T. Looks like that money is going to be used one way or another.
Photo credit: Reuters/Phil McCarten