Verizon buys AwesomenessTV stake

US telco Verizon has bought a quarter of AwesomenessTV in a deal valuing the multichannel network at US$650 million.

The agreement, which is subject to approval, will leave DreamWorks Animation with 51% of the firm, and Verizon and Hearst Corp. both with 24.5%.

Further to that, Verizon plans to create a premium, short-form mobile video service, which will be part of the firm’s Go90 platform offer and be funded through a multi-year initiative with AwesomenessTV.

The VOD platform will showcase content from talent “in front of and behind the camera, and operate as a standalone brand. It will offer transactional VOD content, from “the entire Hollywood community”, with pricing not revealed.

The service will initially be made available in the US, with AwesomesnessTV retaining international rights. AwesomenessTV has been expanding internationally following a deal with fellow digital firm Endemol Shine Beyond.

AwesomenessTV was already producing content for Go90, which is Verizon’s mobile content platform.

“In addition to delivering compelling scripted and non-scripted series with high production values, AwesomenessTV has demonstrated an ability to zero in on programming that Gen Z and millennials want to watch,” said Marni Walden, executive vice president and president of product and new business innovation, Verizon.

“The content AwesomenessTV has produced for go90 has exceeded all our expectations with shows such as Guidance and Top Five Live. That’s why we want to be in the AwesomenessTV business.”

AwesomenessTV CEO and founder Brian Robbins and president Brett Bouttier will both remain at the helm following the deal.

“This deal gives us the resources to work with the biggest talent in front of and behind the camera to create this new branded service and produce the most premium short-form content ever, made specifically for the device racking up the fastest growing viewership – the mobile phone,” said AwesomenessTV’s Robbins.

The acquisition comes after DreamWorks Animation spent US$117 million to buy AwesomenessTV, which has around 90,000 digital channels, in May 2013. Hearst paid US$81.25 million for its 24.5% stake in December 2014, which is just over half of the US$159 million Verizon forked out this week.

“With Verizon joining DreamWorks Animation and Hearst as part of our equity ownership group, we benefit from the strategic insight and resources of the entertainment and communications industries’ most visionary companies and leaders. Our goal is to be the media company of the future, where content and distribution go hand in hand – we are now one giant step closer to that future.”

DreamWorks Animation CEO Jeffrey Katzenberg called the deal “transformational” for the “entire mobile video landscape”, and added: “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.”

The deal is expected to close within 60 days.