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AT&T in half billion dollar streaming video venture

In 2013, AT&T and investment firm, the Chernin Group, tried to buy Hulu... and failed. Now, AT&T and Chernin have announced that they’ll spend up to $500 million to “acquire, invest in and launch over-the-top (OTT) video services.”

As one report noted, the details are murky. “From the press release, it is unclear exactly what type of content the joint venture hopes to offer,” said Gigaom.

OTT means acquiring video content from one source and delivering it to the user over a broadband network. Hulu, Netflix, Amazon Prime are examples. OTT challenges the cable bundle, letting consumers pay for only the video they want to watch.

AT&T, then, wouldn’t be producing video, just transporting IP packets. But AT&T is in an ideal position to do just that: it has 110 million wireless and more than 16 million broadband customers.

As Peter Chernin, Chairman and CEO of the investment group, said, “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.”

The video industry is in technological ferment right now, and it’s difficult to see who the winners and losers will be. But AT&T has the experience, capital and the workforce to become a major player – even if it means going head-to-head with Netflix and Hulu.

AT&T is building its own video service after it failed to buy Hulu (The Verge, Apr. 22, 2014)

AT&T creates $500M joint venture for a Netflix-style TV service (Gigaom, Apr. 22, 2014)