NEW YORK (Reuters) - AT&T Inc said Tuesday it would partner with The Chernin Group media holding company to invest $500 million in a joint venture for web-based video services, making it the latest company aiming to tap the growing consumer demand for online video.
The move follows announcements by Verizon Communications, Disney and Dish Network Corp which have plans to roll out video products outside a traditional TV subscription.
Besides the $500 million investment, other financial terms of the deal were not disclosed.
Chernin Group, former News Corp president Peter Chernin's holding company, produces films and TV shows, and has a stake in Crunchyroll, a subscription and video-on-demand service.
"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," Chernin said.
AT&T has about 110 million U.S. wireless customers and for its U-verse fiber product, it has about 5.5 million video customers and 10.4 million high-speed Internet customers. AT&T said on Monday it expects to expand U-verse to up to 21 U.S. cities, including Chicago and Atlanta.
Earlier this year, The Chernin Group made an unsuccessful bid to buy the Hulu online video site, owned by Twenty-First Century Fox, the Walt Disney Co, and Comcast.
In January, Verizon acquired Intel Corp's OnCue service for an undisclosed sum to accelerate its push into next-generation video services, including integrating it with Verizon's FiOS fiber-based Internet and TV service that has more than 5 million video subscribers, about 5 percent of pay TV households. The company said it was open to providing over-the-top content to any device, meaning the content is utilized over a network but not offered by the network operator. [ID:nL1N0M11PV]
additional reporting by Liana Baker; Editing by Chizu Nomiyama