The telco has a huge base of wireless and broadband customers and plans to take on the likes of Netflix and Hulu with its own video services for connected consumers.
The OTT initiative will see the pair sink cash into acquiring, building and launching web TV platforms, creating both advertising and subscription-based video-on-demand channels and streaming services.
The Chernin Group, the business Chernin (pictured) formed after leaving Fox, will fold in its holding in Crunchyroll.
It acquired a majority stake in the San Francisco-based anime streaming service late last year with Japanese broadcaster TV Tokyo the other major investor. It offers anime fans about 15,000 hours of content.
Peter Chernin said: “Consumers are increasingly viewing video content on their phones, tablets, computers, game consoles and connected TVs on mobile and broadband networks. AT&T’s massive reach on those platforms across mobile and broadband and their commitment to the online video space make them the perfect fit for this venture with us.”
John Stankey, chief strategy officer at AT&T said: “Combining our expertise in network infrastructure, mobile, broadband and video with The Chernin Group’s management and expertise in content, distribution, and monetisation models in online video creates the opportunity for us to develop a compelling offering in the OTT space.”
AT&T currently operates the US IPTV service U-verse, which has 11.3 million subs, but the move into the OTT is its first in the sector.
The telco yesterday reported first-quarter results, claiming the best revenue growth in five years and upping its full-year guidance. First quarter revenues were US$32.5 billion. It added more than two million wireless and high-speed broadband customers in the quarter.