With chief rival AT&T (NYSE: T) about to close its $49 billion purchase of DirecTV (NASDAQ: DTV) and embark on a major expansion of short-form video programming to smartphones and other mobile devices, Verizon (NYSE: VZ) is making moves of its own.
On Wednesday, Verizon announced a deal with DreamWorks Animation-owned YouTube programmer AwesomenessTV to acquire more than 200 hours of original short-form live and animated programming each year for over-the-top distribution.
Speaking at the Deutsche Bank Media, Technology & Telecom Conference in Palm Beach, Fla., Tuesday, Verizon CFO Fran Shammo said his company will launch its long-anticipated OTT service this summer, aiming it toward users of wireless devices, presumably smart phones and tablets.
The AwesomenessTV deal represents the first time Verizon has specifically identified what kind of programming would run on the service.
"It's increasingly clear that 'mobile first' is the way millennials are consuming all types of content, especially HD video and music," said Terry Denson, VP, content acquisition and strategy at Verizon, in a statement.
"The millennials are at that stage where they are forming brand preferences that will likely last a lifetime," said Jim Nail, an online video market analyst at Forrester Research, to the Los Angeles Times. "If brands can't reach them through old media, they will be desperate to reach them through some of these new innovative channels."
Verizon has yet to announce any pricing details for the new OTT service, or whether it will be marketed outside its footprint.
Hearst pays $81.25M to DreamWorks for 25% in AwesomenessTV
AT&T's Stankey: Company will end up spending more on content after DirecTV purchase
AT&T-Chernin JV Otter Media officially buys Fullscreen for reported $200-$300M