AT&T-Chernin venture snaps up Fullscreen stake

Otter Media, the joint venture of AT&T and media holding company Chernin Group, formed in April, announced its intention to buy a majority stake in YouTube content provider Fullscreen in a move to establish firmer foot in the online video market. The news follows Chernin Group’s unsuccessful bid for Hulu LLC, a video streaming service provider in April 2013.

AT&T has praised Fullscreen, founded by CEO George Strompolos in 2011 and which has some 450 million subscribers, 50,000 creators and 4 billion monthly views, saying it is “a pioneering force in the global content creator revolution,” and says the current management of the company will stay in place after the transaction.

“We are excited to have Fullscreen as an integral part of Otter Media, as this supports our focus on youth-based content,” said Aaron Slator, President, Content Development, AT&T.

Chernin Group had previously invested in Fullscreen through a Series A round of funding, and will remain as a stakeholder. “Our relationship with George started over three years ago when he launched Fullscreen in our offices. Since then, George and the Fullscreen team have achieved something remarkable – they have built one of the largest online content distribution networks, as well as created a leadership position in youth-oriented video programming,” said Peter Chernin, chairman and CEO of The Chernin Group.

The transaction of the 200+ -employee Fullscreen is expected to close within a month, subject to regulatory approval. “This is a huge win for Fullscreen and our creators,” George Strompolos said. “Peter Chernin, Jesse Jacobs and the entire team at the Chernin Group have supported our vision since day one. With AT&T as a strategic investor in Otter Media, we are well positioned to redefine youth media in today’s digital-first world. We could not ask for a better opportunity.”

The take-over is another in a series of bids for start-ups referred to as multichannel networks, companies that gather popular YouTube content creators under one umbrella and provide marketing content to individual videos. One example of such a take-over is Walt Disney’s March acquisition of Maker Studios.  But the take-over is also further evidence of telcos’ willingness to branch further out to other areas of content provision, where OTT services play an important part.

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