AT&T, Chernin Group Take Majority Stake in Online Network

Traditional media taps into digital audience

As Internet stars continue to rise over their traditional television counterparts, old media is taking notice and wanting in on the million-dollar action. Which is why Otter Media, a joint venture between AT&T and Chernin Group, has taken a majority stake in online multi-channel network Fullscreen.

"What felt like the future of media four years ago has quickly become the new reality," Fullscreen CEO and founder George Strompolos said in a post on Fullscreen. "It's a new world. Both Hollywood and Madison Avenue have recently taken notice and truly started to embrace this change."

Strompolos left his job four years ago as a YouTube executive with the idea of creating Fullscreen, foreseeing that the new wave of entertainers would connect with fans via social media. Since its creation, Fullscreen has partnered with major content creators like The Fine Bros, Devin Supertramp, Connor Franta and Our 2nd Life, helping them secure branded deals and advertising. In total, they have about 50,000 content creators who have more than 450 million subscribers and get 4 billion monthly views. Insiders have valued the digital media company between $200 million and $300 million, per The New York Times. WPP has also invested in the company and reportedly plans to maintain its shares.

Traditional companies are definitely trying to wrangle the new world of online entertainment. Disney purchased Maker Studios earlier this year, and today's Fullscreen announcement is part of The Chernin Group's plan to delve into streaming video and young audiences.

With young people spending most of their time viewing material online, eMarketer said digital ad spending has gone up 56 percent since last year, for a total of around $5.96 billion this year. Though the number is growing, the market research company reports it is still considerably less than the $68.54 billion spent on television ad marketing.