(Reuters) - Verizon Communications Inc (VZ.N) said it agreed to buy a 24.5 percent stake in AwesomenessTV, whose YouTube channels are among the most popular on the video site, for about $160 million.
AwesomenessTV, which has more than 3.6 million subscribers on YouTube, offers videos on everything from beauty tips to life advice aimed at pre-teens and young adults.
The deal values AwesomenessTV, in which DreamWorks Animation SKG Inc DWA.O owns a 51 percent stake, at about $650 million.
Privately held Hearst Corp, which owns magazines such as Harper’s Bazaar and Esquire as well as TV networks like A+E Networks, will own the remaining stake.
The deal includes the creation of a new mobile video service, which will be funded by Verizon and will launch as a part of Verizon’s go90 mobile video app.
The service will be exclusive to Verizon customers in the United States and AwesomenessTV will retain the right to sell content in the rest of the world.
Most Americans own a mobile phone and a saturated U.S. wireless market has Verizon and its rivals turning to new businesses. Verizon is making a big bet on mobile video aiming to unlock revenue from advertising and data usage.
Verizon launched the go90 app in October and has announced content partners such as the National Football League, the National Basketball Association, the Food Network and Vice Media.
Verizon already has a programming deal with DreamWorks Animation and AwesomenessTV.
Reporting by Narottam Medhora and Kshitiz Goliya in Bengaluru; Editing by Shounak Dasgupta and Saumyadeb Chakrabarty