Viacom pursuing content deals with U.S. mobile operators

Viacom
Viacom’s early steps into mobile content agreements in the U.S. arrive as the company is busy renegotiating carriage agreements with major pay-TV operators.

Viacom is looking to establish content agreements with wireless providers in the U.S. as a means of getting its content in front of viewers who are increasingly watching on mobile devices.

Viacom CEO Bob Bakish told Reuters that his company is setting up a division employing around 100 people who will focus on producing short-form shows designed for mobile consumption. He said that Viacom is moving ahead while viewing and paying for content on mobile is still in the nascent stages.

Bakish declined to mention which U.S. mobile operators Viacom has approached regarding the plans.

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Viacom’s early steps into mobile content agreements in the U.S.—the company already has similar deals with operators in other countries—arrive as the company is busy renegotiating carriage agreements with major pay-TV operators in the U.S. Most recently, Viacom renewed an agreement with Charter Spectrum.

Media analyst Michael Nathanson said that Viacom likely needed to accept lower rates in the Charter deal.

“Viacom was likely realistic about its negotiating power and expected to have rates drop in a similar range to its AT&T/DirecTV renewal back in October 2015,” wrote Nathanson, adding that the AT&T renewal caused Viacom’s U.S. affiliate fee growth to drop from +4% in the first quarter of 2016 to -2% in the second quarter.

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But he noted that Viacom also likely retained the right to launch its own streaming skinny bundle in the near future.

Last month, The Wall Street Journal reported that Viacom—along with A+E Networks, AMC Networks, Discovery Communications and Scripps Networks—is planning to launch a streaming TV service that combines a bundle of entertainment networks and over-the-air signals for the major broadcasters.

The service, which is expected to be priced around $20 per month, is something that Bakish has been publicly touting as a means of offering entertainment-focused cable networks at a lower price by eliminating expensive broadcast and live sports from the bundle.

“We fundamentally believe a lower-price offering would be very compelling,” said Bakish in May during a Viacom earnings call.

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