Verizon Communications Inc. (NYSE:VZ) has announced an acquisition deal with AwesomenessTV where it has purchased a 24.5% stake in the video startup.
AwesomenessTV is a teen-focused YouTube network that was acquired by Dreamworks Animation Skg Inc (NASDAQ:DWA) in 2013 for $33 million. Dreamworks acquired the firm so as to gain footing in the original content space. At the time of the acquisition, AwesomenessTV had 55,000 channels, 800 million views, and 14 million subscribers. It currently has 170 million subscribers and 90,000 channels. Despite Verizon’s acquisition of a 24.5% stake, Dreamworks remains the majority shareholder with a 51% stake, and therefore has the controlling interest.
Brian Robbins, the founder and CEO of AwesomenessTV will maintain in his position, and the same goes for the company’s president Brett Bouttier. Before the stake acquisition deal, Verizon and AwesomenessTV had a partnership where the video network provided content for go90. The new deal will boost the relationship between the two firms, and the video network will be providing video content for Verizon. This means the content will be exclusive to Verizon subscribers in the US. Additionally, the content will be aired on go90, but the firm may choose additional platforms for content distribution.
AwesomenessTV will still hold the rights to the content, meaning it can decide to distribute the content elsewhere. Brian Angiolet, Verizon’s senior VP for consumer product and marketing stated that his company’s plan was to take advantage of emerging trends as well as venturing deeper into the digital space. Angiolet also stated that the current situation is similar to what happened in the initial days when cable started to take root. He stated that Verizon was planning to expand its portfolio through emerging brands, so that it would have a significant impact on the economics of the growing trend.
Robbins stated that Verizon will play a significant role in content distribution and therefore having it as a partner makes a lot of sense.