Otter Media’s deal for a controlling stake in Culver City MCN Fullscreen could set the stage for a showdown with competitor Walt Disney Co.-owned Maker Studios.

With 450 million subscribers, Fullscreen, which bills itself as a “global youth media company,” generates 4 billion monthly views through its 50,000 content creators.

The long-rumored deal by Otter, a joint venture of AT&T and Chernin Group, gives Fullscreen a big-name backer to directly compete in the youth market against its Culver City neighbor Maker Studios, which was bought by Disney in a deal potentially worth $950 million. But while both MCNs provide original content across several verticals, the difference in who’s backing them could shape the direction they go.

“Disney is looking at Maker as a home for repurposing its own intellectual property,” said Peter Csathy, digital media consultant and chief executive of Manatt Digital Media. “But Otter Media has this tremendous distribution platform that’s built in through AT&T … If you’re an AT&T customer, now you can subscribe to this channel and it’s directly part of AT&T’s billing.”

Other L.A.-based, niche-specific MCNs – MiTu for Latino audiences, Tastemade for foodies and DanceOn for the dance community – might not post numbers as large as Fullscreen’s, but the deal further proves that the MCN space in Los Angeles is “no fad,” according to Csathy.

The purchase, he said, shows Otter Media’s commitment to invest big in premium short content video. The JV announced earlier this year a $500 million commitment to expand its video offerings, which include anime subscription service Crunchyroll.

The Fullscreen deal was estimated to value the company at between $200 million and $300 million. Founder George Strompolos will continue as chief executive with an ownership stake. Representatives of Fullscreen and Otter Media could not be reached for comment, but in a statement, Strompolos said, “With AT&T as a strategic investor in Otter Media, we are well positioned to redefine youth media in today’s digital-first world.”

The deal is expected to close within the next month.

Staff reporter Melissah Yang can be reached at MYang@labusinessjournal.com. Follow her on Twitter @MelissahYang for the latest in L.A. tech news.

For reprint and licensing requests for this article, CLICK HERE.