A joint venture between The Chernin Group and AT&T, called Otter Media, has just purchased a controlling stake in one of YouTube’s largest mutli-channel networks – Fullscreen.
The exact terms of the deal were not immediately made public; however, Re/Code reports the deal could be worth between $200 – $300 million.
Rumors of an acquisition have been circling Fullscreen ever since their biggest rival Maker Studios was acquired by Disney for more than $500 million. Yahoo, Time Warner, and Relativity Media are just a few of the media powerhouses known to have expressed in interest in acquiring the company.
“Our relationship with George [Strompolos] started over three years ago when he launched Fullscreen in our offices,” Chernin Group CEO Peter Chernin said in a press release announcing the deal. The Chernin Group was an early investor in Fullscreen, with Peter Chernin personally advising Fullscreen CEO George Strompolos as the company grew into what it is today. They also led Fullscreen’s Series A funding round last year, raising $30 million for the company alongside WPP Digital and Comcast Ventures.
“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,” Chernin added.
Unlike the Maker Studios acquisition, the mutual benefit of this purchase is immediately obvious. AT&T and the Chernin Group formed Otter Media in April 2014 by committing a total of $500 million in funding to invest in, acquire, or align themselves with companies that can advance their positions in online video and Over The Top (OTT) video services. For the uninitiated, OTT is just a media buzzword for any service that uses the internet to bypass traditional media distribution. E.g. Netflix, Hulu, YouTube etc…
Otter Media had previously acquired anime streaming service Cruncyroll and crafts education service Creativebug, giving it a notable library of niche content for their services. However, this purchase gives them access to one of the largest libraries of general-interest online video content imaginable. A years-long archive of videos made by “more than 50,000 content creators who engage 450 million subscribers and generate 4 billion monthly views.” It also gives them access to talent with a pre-established audience to experiment with new content formats.
In exchange, Fullscreen gets the funding and support it needs to provide additional services to its most valuable creators, to build a home for itself outside of Google’s domain, and to experiment with lucrative new ventures such as their recent INTOUR, which saw the company promote a live event with some of their most popular creators.
“This is a huge win for Fullscreen and our creators,” Strompolos added. “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.”
Fullscreen will retain its autonomy, operating as an independent entity under the Otter Media umbrella. Founder and CEO George Strompolos, along with most of the executive team, are expected to stay with the company.