Verizon Buying AwesomenessTV Stake, Adding to go90 Video Offerings

Verizon is buying 24.5 percent of DreamWorks Animation's AwesomenessTV and plans to use it to launch a short-form mobile video service to be shown on Verizon's go90 video affiliate, Verizon said in a news release Wednesday. Verizon President-Product and New Business Innovation Marni Walden said, "The content AwesomenessTV has produced for go90 has exceeded all our expectations with shows such as Guidance and Top Five Live. That's why we want to be in the AwesomenessTV business." Verizon said the new content service, which will have an independent though so-far-unnamed brand, initially will be exclusive to its U.S. platforms, though AwesomenessTV will retain the right to sell it elsewhere in the world. Terms of the purchase weren't disclosed. The company said the deal on close will value AwesomenessTV at $650 million, which Wells Fargo analyst Jennifer Fritzsche said would put Verizon's investment at close to $159 million. In a note to investors Wednesday, Fritzsche said the deal points to advertising-supported video service as among Verizon's top strategic focuses, if not paramount, and future tuck-in acquisitions and investments are likely. Macquarie Capital Analyst Amy Yong, in a note to investors, said, "Embracing the mobile ecosystem with Verizon will likely drive [AwesomenessTV's] Gen Z audience to become even larger. This transaction will redefine mobile video content for the millennial audience and positions AwesomenessTV as a top content leader." DreamWorks will remain the majority shareholder, with 51 percent, and Hearst will own the remaining 24.5 percent, Verizon said.