Otter Media, the online video-focused joint venture between the Chernin Group and AT&T, expects to generate more than $200 million in revenue across its business units this year, executives told Variety this week. This would represent a growth of 70 percent, said Chernin Group President Jesse Jacobs.
The majority of that revenue is being contributed by the multichannel network and services company Fullscreen, which Otter Media acquired a little over a year ago. Fullscreen is looking to further grow its revenue with a new paid service, which the company plans to launch in the coming months.
Jacobs said that he doesn’t see these plans being complicated by the launch of YouTube Red, which launched as a paid tier to YouTube’s free service earlier this month. If anything, getting people used to pay for content would help everyone in the industry, he argued: “It validates the market, it trains consumers.”
Otter Media is already operating a successful subscription service with Crunchyroll, which now has around 700,000 subscribers, who pay between $7 and $12 per month for the service. When the Chernin Group acquired Crunchyroll two years ago, that number was still at around 240,000. Fullscreen also got its hands on a service with 100,000 paying subscribers when it acquired Roosterteeth a year ago.
AT&T and the Chernin Group officially announced their joint venture in early 2014, with both companies committing a total of $500 million in funding to acquire and build online video services. Otter Media recently founded a new corporate entity called Ellation for Crunchyroll, and has plans to launch additional subscription services under the Ellation umbrella in the future.
Once those and Fullscreen’s service are launched, we may also see more involvement from AT&T, which has thus far largely been a silent partner in the joint venture. Jacobs and Chernin Group and Otter Media EVP Sarah Harden declined to comment on what exactly AT&T could contribute in addition to funding, but one could imagine that the telco giant could use its mobile and TV businesses to promote Otter services to its customers. “There are a lot of opportunities with them,” said Harden.