ViacomCBS will launch a new streaming service as a ‘House of Brands’ that expands upon CBS All Access.
Presenting its first quarterly results since completing the merger of Viacom and CBS, the company is putting its weight behind streaming. The company’s presentation said that it will “take a differentiated approach that builds on ViacomCBS’ unique foundation in streaming, plays to its strengths and fulfills unmet audience and partner needs.”
The presentation also noted that the new streamer will “complement the company’s leading free Pluto TV and premium pay Showtime OTT offerings by adding a broad pay offering, built on the foundation of CBS All Access.”
While Pluto TV has rapidly expanded around the world since it was picked up by Viacom for €300 million in January 2019, CBS All Access and Showtime have largely been focused on the domestic US market. However, the company said that the new ‘broad pay’ product will be designed “for audiences around the world.”
With details scarce, it is unlikely that this streamer will be intended to rival the upcoming HBO Max or Peacock, but with an abundance of networks – including MTV, Comedy Central and BET – ViacomCBS certainly has enough content to provide a compelling product, as evidenced from the choice selections made available on Pluto TV.
CEO Bob Bakish said: “We will take CBS All Access and expand it to be a robust and compelling offering to serve the broad pay streaming segment. This offer will affirm and expand the value of entertainment, news and sports content through on demand and live experiences for audiences around the world.”
He added that the service will also be a “powerful combination of live linear via over 200 local CBS stations, plus on demand content spanning news, sports, film, drama, reality, kids, and more with a global platform and infrastructure from which to market and scale it.”
CBS All Access was one of the earliest premium streamers launched by a major broadcaster in October 2014. Though it has garnered a respectable 10 million subscribers, it has since been eclipsed by HBO Now and Disney+ – both of which launched significantly after.
The company estimates that CBS All Access and Showtime will reach a combined 16 million subscribers by the end of 2020. In 2018, CBS said that it expected both streamers to reach a combined 25 million subs by 2022.
The company was also pleased with the performance of Pluto after a year.
Bakish said: “We have the leading free streaming TV service in Pluto TV with over 22 million monthly active users in the US up 75% year over year and we expect to exit 2020 with approximately 30 million MAUs domestically.”
The service has rapidly expanded since its acquisition, and is currently available in the UK, Germany, Austria and Switzerland with a Latin America launch next month.
CFO Christina Spade said that Pluto is an “integral part” of its advanced advertising efforts, with the 9% jump in domestic ad revenue being attributed to the platform.
Bakish added that the financial benefits of the service are clear to see. “Pluto is very capital efficient,” the CEO said. “That is essentially a revenue share model, not an ‘invest in content and build it out’ [model]. So as we launch in places like Latin America, you don’t have this big working capital headwind. You have a model that scales with the business.”
Wall Street worries
Despite being positive about its streaming efforts going forward, the company’s Q4 – branded “transitional” by Bakish – has scared the markets with the stock dropping by 18% in early trading.
Overall, it saw a net loss of US$273 million, down from a profit of US$884 million year-over-year. Revenue similarly dipped by 3% to US$6.9 billion.
Bakish argued that this is largely as a result of merger-related expenses and called on investors to disregard the quarter.
He said: ““In less than three months since completing our merger, we have made significant progress integrating and transforming ViacomCBS. We see incredible opportunity to realise the full power of our position as one of the largest content producers and providers in the world. This is an exciting and valuable place to be at a time when demand for content has never been higher, and we will use our strength across genres, formats, demos and geographies to serve the largest addressable audience, on our own platforms and others.
“In 2020, our priorities are maximising the power of our content, unlocking more value from our biggest revenue lines and accelerating our momentum in streaming. With this as a backdrop, we’ve set clear targets for the year and are providing increased transparency around our business to demonstrate ViacomCBS’ ability to create shareholder value today, as we continue evolving and growing our business for tomorrow.”
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