AT&T has announced it will bring the SVOD service Hulu to its customers through its web sites and mobile applications beginning in the fall.
The news comes on the heels of Monday’s announcement that competitor Verizon is buying AOL for $4.4 billion, and, according to one analyst, can be seen as the latest volley in a competition between the two services providers, as they both try to harness their networks to become pre-eminent players in the online video content business.
“AOL has been more focused on longer-form content,” said Peter Csathy, CEO of Manatt Digital Media, a division of the law firm Manatt, Phelps & Phillips, providing business consulting and legal services for the new media space.
AT&T has made some bold moves through Otter Media, a company it launched in partnership with the Chernin Group in April 2014 with $500 million in funding to acquire, invest in and launch OTT video services.
In September, Otter acquired a majority stake in multi-channel network Fullscreen, adding to a portfolio that includes Crunchyroll, a streaming service specializing in Japanese anime and other Asian content, and the how-to crafting video site Creativebug.
“So I would say that Otter Media is ahead of the curve, because they have all those assets and those are proven assets with massive numbers,” Csathy says. “Verizon is looking to catch up in that type of strategy. But, the last time I checked, Verizon has a bigger distribution footprint than AT&T.”
With its acquisition of AOL, Verizon gets an added facility for content production, as well as programmatic advertising platform.
“Verizon is not known as being a content creator on a mass scale,” says Csathy. “As a result, it hasn’t had a significant sales force to sell advertising against content. Now, it’s a very different ballgame because AOL, although it hasn’t been overly successful in the video-focused game, certainly has spent a lot of dollars in that world, and they definitely have a human sales force as well as technology to effectively drive the marketers to that content.”
Although Verizon has Fios – a bundled TV, internet and phone service that includes on-demand video for viewing on traditional TV screens – Csathy calls the AOL purchase “a mobile-driven deal.”
Alec Shankman, VP and head of alternative programming, licensing & digital media at Abrams Artists Agency, thinks both companies are making smart moves.
“Verizon has been a leader in mobile content for a long time at this point, going back to their foray into Verizon V-cast and beyond. This is simply another feather in their cap of forward thinking,” said Shankman in an email interview. “AOL is now more valuable to content creators than ever because their inevitable seamless integration into mobile will allow for not only increased distribution potential, but presumably also create a better content consumption experience. The world has already gone mobile and the smart content creators are not only very well aware of this; but have embraced it with open arms.”
At the NewFronts last month in New York, Hulu announced a slate of new original series. It also confirmed the purchase of the exclusive streaming rights for the next several years for all nine seasons of Seinfeld, the iconic sitcom, for $180 million.