Otter Media, a joint venture of AT&T and the Chernin Group that was established for investments, acquisitions and launches of over-the-top video services, has purchased a majority share in online video company Fullscreen, a producer of music and shows that are distributed through the YouTube network.
Otter Media's acquisition of the stake represents the latest move of a TV company in pushing to offer program services through the Internet.
The acquisition will value Fullscreen at $200 million to $300 million, according to sources that are familiar with the matter but wish to remain anonymous as the terms have not been made public.
"The trajectory they are on is unbelievable, especially when you look at how 10- to 25-year-olds are consuming video," said Chernin Group president Jesse Jacobs. "The TV business is a $200 billion business, and it is increasingly migrating online. Fullscreen is one of the companies at the forefront."
As part of the deal, George Strompolos, the founder and CEO of Fullscreen, will remain as the company's CEO and maintain his material ownership share.
Fullscreen, which was founded over three years ago in January 2011, is working with over 50,000 content creators that engage 450 million subscribers to their network, generating monthly views reaching 4 billion.
Fullscreen also has a close relationship with YouTube, which allows the company to become a pioneer in the global content producer revolution. The group is seen as a leading YouTube partner network.
Both Peter Chernin, the CEO and chairman of the Chernin Group, and Aaron Slator, the president for content development of AT&T, have expressed their excitement to be working with Strompolos and the entire Fullscreen team.
According to Slator, having Fullscreen as a vital part of Otter Media supports the venture's focus on content that is geared primarily for the youth.
"What Fullscreen is doing in terms of redefining entertainment and media for young adults is powerful on a global scale," said Jacobs.
Content creators under the Fullscreen network include The Fine Brothers, Cyanide + Happiness, and Tyler Ward.
Fullscreen currently makes most of its revenue through video advertisements. However, strategies are being developed to expand the company's business and revenue channels to include talent management, integrated marketing, merchandise, live events and subscription sales.
The transaction on Otter Media's acquisition of a majority share in Fullscreen is expected to close within October.
Otter Media's acquisition of Fullscreen comes as the company is currently preparing to develop its video services with its proposed acquisition of DirecTV for $48.5 billion.
