Verizon Communications has agreed to acquire a 24.5% stake in AwesomenessTV, an online video startup owned by Dreamworks Animation, in furtherance of its aim to form a premium online video streaming service. Under the deal, Dreamworks Animation will retain its controlling 51% stake in AwesomenessTV, which is valued at $650 million, whereas media titan Heart Corporation will hold the remaining 24.5%.
AwesomenessTV is known for its youth-oriented video programming, available on its popular Youtube channel which currently has over 170 million subscribers and 16 billion views under its belt. Brian Robbins, CEO of AwesomenessTV, notes that 80% of its viewership has now moved to mobile, so it’s easy to see what Verizon brings to the table and gets out of this deal. The move by Verizon underscores the importance of providing content aimed at millennials and Gen-Z to the success of its mobile video platform, go90.
While the two companies already had a pact in place to provide exclusive video content for distribution on go90 (including shows like “Guidance” and “Top Five Live”), AwesomenessTV will now be launching a premium short-form mobile video channel under its brand as part of the go90 streaming service.
While go90 is a free ad-supported service, this deal helps Verizon expand its pay-model that allows users to access more exclusive content, the likes of which AwesomenessTV will be producing. Verizon will control exclusive distribution rights in the US for content produced on the new channel which is expected to premiere in 2017, whereas Awesomeness will have rights to sell the content everywhere else.
On the flipside, AwesomenessTV will now enjoy the resources and distribution channels that the largest telco in America can provide. Robbins commented that ” to have Verizon, the biggest phone company in the world, as one of our partners, just makes a whole lot of sense from a distribution standpoint. We are really trying to build the media company of the future.”
According to a statement released by Jeffrey Katzenberg, CEO of Dreamworks Animation, this agreement is expected to be a boon to AwesomenessTV, whose annual revenues will enjoy massive growth following its content delivery deal: “This agreement is clearly impactful for AwesomenessTV – with annual revenues expected to more than double in the first 12 months of content delivery – and even more exciting is the expansion of our relationship with Verizon, one of the world’s most powerful marketers and content distributors, and their commitment to explore with us this incredible opportunity.”