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Chernin, AT&T Set Brand for New Online Video Venture: Ellation (Exclusive)

Otter Media, the joint venture between AT&T and the Chernin Group, is about to unveil a new brand for its subscription-based online video services this week: Ellation is going to be the new umbrella company for video services including Crunchyroll, Creativebug and SoompiTV, Variety has learned.

While work on Ellation has largely been hush-hush over the past couple of months, its goal is to build between 30 and 50 separate niche online video channels appealing to highly engaged audiences willing to pay for premium content, according to multiple sources familiar with these plans. The unit is being led by former YouTube executive Tom Pickett.

The Chernin Group teamed up with AT&T on Otter Media in April 2014 to invest in and launch online video services. Armed with a $500 million war chest, Otter has since acquired a majority stake in Fullscreen as well as Crunchyroll and Creativebug.

But Otter was always just supposed to be the joint venture umbrella, with separate business units under it: One of them is Fullscreen, the YouTube multi-channel network and services company. The other one has been largely built around Crunchyroll and its successful anime video subscription service.

Early on Crunchyroll executives toyed with plans to branch out and build a new type of online video subscription platform for users who don’t subscribe to traditional cable anymore, a project that was internally called “Second TV.”

An early mock-up of a Second TV app, presenting access to multiple subscription services through a unified interface.
An early mock-up of a Second TV app, presenting access to multiple subscription services through a unified interface.

After the acquisition through Otter Media, these plans accelerated, and talent from Hulu and YouTube was hired to staff the new company. Pickett, who served as VP of content at YouTube, came on board in October.

However, the name Second TV was quickly abandoned, in part because executives didn’t want to position these new services as second to anything. Rumor has it that the project was internally code-named “Hampton” for some time.

Eventually, Ellation was picked as a word play on the Aleutian Islands, a chain of volcanic islands between Alaska and Russia that appear to be separate islands, but are part of the same volcanic arc under the sea level. That idea of interconnected islands resonated with the Otter Media team, given Ellation’s mission to launch many more services.

Some time in the last few days, employees started to switch their Linkedin profile affiliations from Otter Media or Crunchyroll to Ellation, and a new website went up, complete with a mission statement: “We build premium video experiences for passionate fans and provide sustainable business models for content creators.”

For Ellation, Crunchyroll is a kind of proof of concept: The service has been one of the success stories of paid niche content, attracting more than 600,000 paying subscribers, according to sources familiar with the company. However, nobody knows how many of these superfan communities actually exist, and how many online video services consumers are willing to add to their monthly bill.

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