Verizon Buys More Mobile Video by Investing in DreamWorks' AwesomenessTV

Another sign that Verizon really, really wants to be in the media business: The telco has bought a minority stake in AwesomenessTV, the tween-centric digital video company owned by DreamWorks Animation.

Verizon says it is buying 24.5 percent of the company from DreamWorks, which will continue to own 51 percent of the unit; Hearst owns another 24.5 percent. Verizon says the deal values Awesomeness at $650 million; Hearst invested in the company in 2014 in a deal that valued it at $325 million.

All of which makes DreamWorks look pretty smart for buying Awesomeness for about $120 million in 2013.

The point of the deal is to give Verizon more stuff that it can send to people to stream on their phone. Verizon says Awesomeness will create a “a first-of-its-kind premium short-form mobile video service featuring leading talent in front of and behind the camera.”

Translation: Verizon is buying more product for its Go90 service, which has big ambitions but has yet to generate much traction with its target audience of young video consumers. It’s the same rationale that prompted Verizon to join Hearst in a similar joint venture earlier this year.

One difference here is that unlike other Go90 content, which is free and ad-supported, Verizon intends to charge its users extra for this stuff, via some kind of subscription tier. That should launch at the end of this year or early in 2017, says Awesomeness CEO Brian Robbins. “The next evolution in short-form video is super-premium video, on par with cable networks like HBO,” he said.

UDPATE: Verizon certainly seems to think the video is worth a premium. In addition to the equity investment, it will eventually pay for the programming via a “multi-year agreement” that DreamWorks says will “more than double” AwesomenessTV’s annual revenue “in the first 12 months of content delivery.”

DreamWorks doesn’t formally break out AwesomenessTV’s revenue, but it comes pretty close, via a segment it reports as “New Media”. Last year that business generated $72.8 million for DreamWorks. So it’s reasonable to assume that Verizon will pay at least $73 million more for the shows it will be re-selling.

This article originally appeared on Recode.net.

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