Verizon’s new equity stake in AwesomenessTV another step in escalating content arms race

By Jim O'Neill on Apr 07 2016 at 8:00 AM
Verizon’s new equity stake in AwesomenessTV another step in escalating content arms race

Getting the right content to attract Millennials and younger viewers to mobile video services is a crucial – and proving to be more difficult than carriers have expected – first step in growing a service.

In the U.S., Verizon and AT&T have been loading up their catalog with everything from shorts to live sports, and that shopping spree continued this week with Verizon announcing it was buying a minority stake in DreamWorks Animation’s AwesomenessTV, looking, no doubt, for an answer to its lackluster debut of its Go90 mobile service.

Awesomeness TV -- is a multi-platform media company that includes AwesomenessTV, the ATV Network, Big Frame, DreamWorksTV, Awestruck, Awesomeness Films, Wildness, as well as consumer products, music and branded entertainment divisions. The company’s youth-focused content is targeted at digital natives, and, following the sale, now has a value of about $650 million. DreamWorks will keep 51% of the company and Verizon and Hearst will each hold 24.5%.

In addition to Verizon’s equity investment, the operator also will work with AwesomenessTV to create a first-of-its-kind premium transactional short-form mobile video service for Go90. The service will be exclusive to Verizon platforms in the U.S., although AwesomenessTV will keep the rights to sell its content elsewhere.

"The creation of this new branded service represents a transformational step, not just for AwesomenessTV, but also for the entire mobile video landscape," said Jeffrey Katzenberg, CEO of DreamWorks Animation.  "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."

AwesomenessTV was founded by Brian Robbins (Smallville, Varsity Blues, All That) and Joe Davola (In Living Color, Smallville, MTV Networks), and was acquired by DreamWorks in 2013. Robbins will continue to lead the company along with President Brett Bouttier.

The transaction should close within the next 60 days.

Original content's growing value

The race to acquire new content – especially original content -- quickly is becoming the hottest one in the industry. Netflix is rolling out some 600 hours of original content in 2016, a huge chunk of the $6 billion it plans to spend on content this year. HBO also has said it will up its own content production to 600 hours this year as it goes head-to-head with Netflix in a growing number of international markets.

In the United States alone, original scripted TV series have increased from just 211 in 2009 to 409 in 2015, with analysts expecting that number to rise.

Obviously, it’s not just aggregators like Netflix, Amazon and Hulu, or traditional broadcast networks and premium cable nets that are looking to load up on content.

Newspapers, magazines and enterprise customers who have moved aggressively into the digital space also are looking for fresh content.

It can be an expensive proposition but, without new content, antsy consumers – especially younger viewers – will churn to new services.

Stay tuned.

Follow me on Twitter @JimONeillMedia and on LinkedIn

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