AT&T and media executive Peter Chernin are doubling down on their efforts to convince the YouTube generation to pay for videos.
The owners of Otter Media are backing VRV, a new streaming service with videos from popular web channels Crunchyroll, Rooster Teeth and Cartoon Hangover. VRV announced Thursday it also signed CollegeHumor, Funimation and Machinima to join its programmer lineup, the final additions before the service debuts later this year.
The channels boast a combined audience in the tens of millions on YouTube, and more than a million paying subscribers on their own. By bringing them together into one place, VRV aims to build a new web media brand that can stand out in an increasingly crowded marketplace. The price for the paid service hasn't been set.
"We are bringing together a bunch of brands that give us critical mass," said Tom Pickett, chief executive officer of Otter-backed Ellation, the San Francisco-based company launching VRV.
If Netflix, Amazon and Hulu are the broadcast networks of web TV -- big, broad catalogs that have something for everyone -- VRV is more of a niche offering, with plans to focus on fans with overlapping interests like anime, video games and caustic humor. VRV customers will be able to watch some videos for free, pay for individual channels or buy a bundle combining many of the services.
AT&T and Mr. Chernin, a former protege of Rupert Murdoch, formed Otter Media after unsuccessfully trying to buy Hulu in 2013. While Hulu's owners ultimately decided not to sell, Mr. Chernin and AT&T grew more interested in paid web video services. AT&T is the largest U.S. pay TV service, with 25.3 million subscribers following its purchase of DirecTV last year.
Otter Media has spread around its bets. It also acquired a majority stake in Fullscreen, a web video company that has since created a paid service targeted at millennials.
Like YouTube's paid service Red, Fullscreen and VRV are acquiring and commissioning original programming to entice consumers. Mondo Media, a San Francisco-based animation company with a large following on YouTube, will produce new shows for VRV.
"We still plan to use YouTube to test shows, find an audience at scale and push them towards paying for content," John Evershed, Mondo Media's CEO, said in an interview.
-- Bloomberg News
