AT&T (T +0.6%) and the Chernin Group (headed by ex-News Corp. president Peter Chernin) are committing over $500M to a JV that will "acquire, invest in, and launch" both ad-based and subscription Web video services.
AT&T/Chernin are going after a crowded market whose ad-supported segment is dominated by YouTube (1B+ monthly users), and whose subscription segment is dominated by Netflix (35.7M U.S. subs and $7.1B worth of content obligations at the end of Q1).
Interesting timing: Netflix's Reed Hastings bashed the performance of AT&T's U-verse broadband services in yesterday's shareholder letter, while calling on AT&T to agree to a peering deal. AT&T's own Q1 report arrives this afternoon.
Yesterday: AT&T names 100 "candidate cities" for 1Gbps U-verse