06 April 2016, USA :
Verizon just agreed to buy a 24.5% stake in the digital programming operation that values the entire enterprise at $650 million — and has big plans to use it for a new mobile video service.
The news sent DWA shares up more than 3% in early trading this morning.
The companies describe their initiative as a “first-of-its-kind premium short-form mobile video service.” It will have its own brand and include “premium transactional content for a variety of audiences on par with the highest-end content seen on television today.”
Verizon will offer it on its ad-supported Go90 mobile platform and supply some of the cash as part of a multi-year deal with AwesomenessTV. Verizon will have it exclusively in the U.S., at least initially, and the DWA unit can sell the content abroad.
There’ll be no changes in the management under AwesomenessTV founder and CEO Brian Robbins and President Brett Bouttier.
DWA will still own 51% of AwesomenessTV. Hearst — which paid $81.25 million for a quarter of the operation in late 2014 — will continue to hold 24.5%.
Katzenberg calls the new service “a transformational step, not just for AwesomenessTV, but also for the entire mobile video landscape.”
The company is eager to draw Wall Street’s attention to the progress it’s making in new media: The category, which includes AwesomenessTV, generated $72.8 million in revenue last year, up 48.6%.
Stifel Research’s Benjamin Mogil says he likes the deal with Verizon joining Hearst, since it gives AwsomenessTV two strategic partners.
LionTree Advisors helped Verizon with the details while J.P. Morgan Securities worked with DWA.
Image : techcrunch.com
