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AT&T gathers $500 million to launch a new online video service

AT&T today announced a $500 million joint commitment with The Chernin Group to invest in a new online video endeavor. The Texas-based telecommunications giant hopes to stretch its services beyond its central phone and cable business by jumping into the very hot online video market (Netflix recently announced Q1 financial results that saw an increase in both profit and customers). AT&T is the latest player to try its hand at online video – Disney, Dish Network, and a number of other companies have recently joined the fray.

The Chernin Group is a good choice for AT&T – the media holding company is led by Peter Chernin, who formerly spent two decades as chief operating officer and president of News Corporation, heading up Twentieth Century Fox Filmed Entertainment and the Fox Broadcasting Company. Titanic and Avatar – two of the highest grossing movies in history – were both produced under Chernin’s leadership. The Chernin Group is no stranger to the online video realm, either, having acquired the anime-streaming site Crunchyroll (the majority stake of which Chernin is contributing to the joint venture with AT&T) in December 2013.

This move is a logical one for AT&T. The company understandably wants a piece of the profits that companies like Netflix are generating via content delivered over AT&T’s networks. AT&T is a middle-man of sorts right now, but it wants to nix that role and compete with video-streamers by delivering content itself.

Aside from the $500 million commitment, AT&T hasn’t released any other details concerning the move.