AT&T, Chernin buy majority stake in Fullscreen YouTube network, valuing it between $200-300M
AT&T & Chernin Buy Fullscreen, the Big YouTube Video Network — Otter Media, the Web video joint venture between AT&T and the Chernin Group, is confirming its deal to buy a controlling stake in Fullscreen …
Context & Ripple Effects
Fullscreen has been on the block all year: in May 2014 Bloomberg reported that Time Warner had joined Yahoo in talks to buy the network, making today's buyer the surprise winner of a quiet auction. The winning bidder, Otter Media, only exists because AT&T created the $500 million joint venture with the Chernin Group this past April to chase a Netflix-style TV service — and Chernin and AT&T had already scouted content deals together, including a discussed joint bid for Hulu back in 2013.
The deal also extends a two-year-old pattern: Variety flagged in November 2012 that media companies were flocking to YouTube power players, when Time Warner led a $40 million round in rival network Maker Studios. With eight outlets from the Wall Street Journal to TechCrunch carrying the news on day one, Fullscreen's sale reads as confirmation that MCNs have graduated from YouTube aggregators to strategic media assets.
First-order effects
- Fullscreen's owners secure partial liquidity at a reported $200-300 million valuation while gaining access to AT&T's distribution scale and Otter Media's balance sheet.
- The auction closes without Time Warner or Yahoo, both of which pursued the network earlier in 2014, leaving them empty-handed on this asset.
Second-order effects
- Rival networks such as Maker Studios become comparatively scarcer strategic assets, likely pressuring other bidders who missed Fullscreen to move on remaining independent MCNs.
- AT&T now holds owned digital-native video inventory it can fold into its consumer bundles — it was already selling HBO packaged with broadband at $40-plus price points as of July 2014.
Third-order effects
- If the pattern holds, YouTube's multi-channel networks consolidate into a handful of corporate-owned properties, ending the era of the independent MCN as venture-backed standalone businesses.
- The deal deepens the convergence of telecoms into content ownership: carriers that once merely distributed video are buying production pipelines outright, echoing AT&T's earlier interest in Hulu alongside Chernin.
The trend: Telecom and legacy media giants are racing to acquire multi-channel YouTube networks as ready-made over-the-top video platforms, with Otter Media's purchase of Fullscreen following Time Warner's backing of Maker Studios.