The Chernin Group and AT&T have formed a venture to invest more than $500 million in online video services, increasing their reach in a rapidly expanding market that competes with traditional television channels.
Chernin Group, run by the former Fox president Peter Chernin, is contributing to the new venture its majority stake in Crunchyroll, a subscription video-on-demand service that specializes in Japanese animation known as anime.
In announcing the venture Tuesday, the two companies did not identify what properties they might want to buy. The goal, they said, was to invest in advertising and subscription video-on-demand channels and streaming services.
The alliance between AT&T and Chernin Group marks another deep-pocketed investor invading a space pioneered by young and scrappy upstarts, including
AT&T and Chernin said their venture would acquire, invest and launch online video offerings known as over-the-top (OTT) services, because they travel into the home through Internet connections rather than the conventional cable set-top box.
Financial terms of the deal were not disclosed.
"Consumers are increasingly viewing video content on their phones, tablets, computers, game consoles and connected TVs on mobile and broadband networks," Chernin said in a release announcing the alliance. "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."