AT&T Investing $500M in Internet Video with Chernin Group

AT&T has announced a partnership with media holding company The Chernin Group. The partnership will work exclusively in the Internet video services industry by investing $500 million into the sector. By investing, managing, and launching new online services, the partnership may yield new competitors in what is already a crowded industry.

With its U-verse TV, Internet, and Voice service, AT&T is already competing against traditional cable providers. Although some members of the television industry could suffer as a result of people canceling cable subscriptions, the major TV providers are also Internet service providers (ISPs) and will therefore be fine.

The partnership between AT&T and The Chernin Group may be one of the largest, but it is not the first. AT&T's rival telecommunications provider, Verizon, is also looking to enter the online video industry after it purchased Intel Media earlier this year. Prior to the acquisition, Intel Media had planned to release its own TV streaming service.

A Crowded Industry

Netflix, Amazon, YouTube, and many others have become popular video streaming services, particularly among those who have pulled the plug on their cable subscriptions. Now that the potential size of the streaming market has been realized, other large companies like Walt Disney are spending millions to get their foot in the door.

Just this month, Walt Disney spent $950 million to acquire Maker Studios, one of YouTube's largest multichannel networks. The Maker Studios network includes 50,000 channels and generates an estimated 5.5 million page views each month. This type of investment in the online video streaming market is now becoming viable and AT&T's partnership with The Chernin Group proves that.

Other media providers like Netflix have taken over the Internet and are now responsible for the majority of bandwidth usage that ISPs see. This means that as more people move online for video...

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