AT&T wants to be more than a broadband provider and wireless company — and it's looking to a Netflix-style video streaming service as its breakout move.
In partnership with the Chernin Group, AT&T has committed $500 million in funding to a venture that will focus on acquiring, investing in and launching over-the-top (OTT) video services and subscription VOD channels.
John Stankey, chief strategy officer at AT&T, said that by combining AT&T's experience in network infrastructure, mobile, broadband and video with The Chernin Group's strengths in content distribution and monetization, the venture becomes a unique offering in the OTT space.
Chernin Group founder Peter Chernin added in the announcement that the online video industry has been a core component of his company’s strategy. He also hinted that AT&T's attractiveness as a partner stems from its broad consumer reach across platforms:
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.
Although the venture taps into a field already crowded with players, AT&T has an opportunity to differentiate on content in a way that puts Comcast or FiOS in a defensive position. No real specifics were given as to the types of content the venture plans to offer.
Further financial terms of the transaction have not been disclosed.