AT&T strengthens over-the-top services with Fullscreen

Electra Woman and Dyna Girl
Source: Electra Woman and Dyna Girl

As more telecommunications and cable companies become their own digital programmers, AT&T is also ramping up its efforts in over-the-top services.

Fullscreen Media is majority-owned by Otter Media. The company is a venture by AT&T and former News Corp. President Peter Chernin's outfit, The Chernin Group. It launched its digital video subscription service on Tuesday. The multichannel network's offerings range from licensed TV shows and movies aimed at the teen and young adult audience to original programs featuring digital stars, all for $4.99 a month.

"We think it's such a great complement to what we're doing on the traditional paid TV model with DirecTV, and we know that not all consumers are going to watch paid TV," said David Christopher, chief marketing officer of AT&T entertainment and internet services group. "We want to be where consumers want to be. We think the Fullscreen model is interesting and captivating, and gives a platform to young creators."

Samsung's SUHD TV Quantum dot display.
How to sell a TV in 2016: Hint—Play to cord-cutters
George Strompolos, founder and CEO of Fullscreen
21. Fullscreen

In September, Verizon launched its over-the-top,millennial-aimed digital video service, Go90. Earlier that month, Comcast had released competitor Watchable.

"We think this is very different from Go90," said Christopher. "This is about cultivating a huge ecosystem of creators, and having them do what they do best. This is not curation from AT&T."

AT&T has worked with Fullscreen Media in the past on initiatives like the "SummerBreak" digital series. In addition to expanding OTT services with the digital network, the company announced in March that it plans to offer three packages of digital DirecTV services in the fourth quarter of 2016.

The Fullscreen service has classic teen shows like "Saved by the Bell" and "Dawson's Creek." Subscribers will also have access to exclusive series including "Electra Woman and Dyna Girl," a reboot of the 1970s Sid and Marty Krofft science fiction TV show. The modernized version stars Grace Helbig and Hannah Hart, two comedians who achieved fame through their YouTube channels. There's also daily sketch comedy series "Party in the Back," starring Issa "Twaimz" Tweimeh, Josh Leyva, Rachel Scanlon and Brandon Armstrong.

Other shows include "Filthy Preppy Teen$," produced by Paul Scheer and Jonathan Stern, and an upcoming series by Bret Easton Ellis called "The Deleted."

"This isn't just hey, that stuff you're doing on YouTube or Instagram, come do it over here instead," said Fullscreen Media CEO George Strompolos. "We think that takes value away from consumer. Instead what we're saying is we have a really robust, dynamic business to help you make content on social media, to help you grow, to help you make more money doing that. We've been doing that since day one. But when it comes to original programming, we want it to be great. We want it to be something you couldn't do on your own."

Zoe Saldana
Verizon’s attempt to reach millennials
John Skipper
ESPN's John Skipper talks strength of the TV bundle and going OTT

What also makes this Netflix-style competitor stand out is the fact that it was developed with the mobile audience in mind. Strompolos said that when Fullscreen Media was founded in 2011, 7 percent of its viewership was on mobile devices. Today the company wasn't trying to create the next Facebook or Snapchat, but rather develop an entertainment service that is "social in nature."

"We knew that the Fullscreen experience had to be mobile-first, and it had to be vibrant and dynamic," said Strompolos. "We spent a lot of time building the product and the product design and the engineering behind all of Fullscreen. We built this all in-house. There are plenty of off-the-shelf solutions that you can go buy and launch your own product, but they are sort of subpar, if you ask me."

Search options involve finding shows based on "snack" or "binge" watching lengths.

"It reflects how young people are actually consuming," said AT&T's Christopher. "I have time to binge, and I want to find content that lets me settle in, or I have a quick, snackable moment, and I want to find something that lets me laugh out loud or gets me going for the five minutes I have."

Videos also aren't categorized under traditional labels like dramas and comedies; instead, they're filed under topics like "Learning New Things," "Feeling All the Feels" and "Getting Weird." The app also has a built-in GIF-maker, which allows the viewer to clip moments on videos and share them with other subscribers as well as on their social feeds.

Fullscreen won't have any advertising at launch, nor are there plans to include traditional banner ads and before-the-video commercials. However, Strompolos doesn't rule out the possibility that the Fullscreen service may include branded series in the future.

Disclosure: CNBC parent company NBC Universal is owned by Comcast.