Chernin: Future of video will be big events or content for highly targeted communities

Peter Chernin, right, discusses the video business.

LAS VEGAS – Peter Chernin, CEO of the Chernin Group, said that the video business in the future will be dominated by big events like the Olympics, or highly targeted content that appeals to communities of viewers.

“The world will completely go to big events or highly targeted [audiences],” he said here during a CTIA keynote appearance.” Chernin described big events like the 100 meter dash in the Olympics or the Super Bowl as driving viewership on the video platforms of the future. On the other end, Chernin said niche content would also appeal to smaller but highly targeted groups of viewers.

“The stuff in the middle is gone forever,” he said.

Interestingly, Chernin pointed to Rooster Teeth as an example of a successful, highly targeted community of video viewers. Chernin’s Fullscreen purchased Rooster Teeth a year ago.

Chernin said Rooster Teeth produces roughly 1,500 hours of video content per year and mostly distributes it to YouTube. He said roughly a third of the operation’s revenues come from advertising, but another third comes from selling licensed apparel promoted by the personalities on Rooster Teeth. He said sales of Rooster Teeth are so popular because viewers “love the brand.”

Chernin added that Rooster Teeth also holds an annual convention, dubbed RTX, that this year attracted 65,000 fans. He said this is because the brand is so popular among its fans.

“It’s about building an audience,” Chernin explained. “You’ve got to demand viewers’ attention.”

Chernin also addressed the changing landscape for advertising. He said a good example of the future of advertising is Fullscreen’s Summer Break show, which is sponsored by AT&T as part of the carrier’s “don’t text and drive” marketing campaign. He said one Summer Break video received 150 million views in nine days. “People who view that don’t think of it as advertising,” he explained.

Chernin’s appearance here at the CTIA show is noteworthy because AT&T in 2014 teamed with the Chernin Group to create a $500 million joint venture called Otter Media to "acquire, invest in and launch over-the-top (OTT) video services." Otter Media acquired YouTube multichannel network Fullscreen, also in 2014, for a reported $200 million to $300 million.

AT&T, for its part, likely will leverage that partnership as it works to launch an OTT service based on its DirecTV brand in the fourth quarter of this year.

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