SAN FRANCISCO — Count Jeff Shultz, chief business officer for ad-supported video aggregator Pluto TV, as no fan of the virtual MVPD business.
“Every day I thank god I don’t run a $40 skinny bundle. They all operate at negative gross margins, and for structural reasons, that won’t change,” Schultz said yesterday, speaking at the annual TV of Tomorrow conference on the old Presidio complex.
Shultz, a former CBS Interactive executive who served as an advisor to Pluto for four years before joining the company full time in January, described ad-supported Pluto as a “rapidly growing free vMVPD.”
Noting recent estimates that the subscription vMVPD market has a total of around 5.3 million users right now, Shultz said Pluto has twice the audience.
So, 10.6 million monthly unique users? he was asked by Fierce during the audience Q&A portion of the panel.
Shultz backtracked a bit, conceding that Pluto—which announced it was up to 6 million uniques several months ago—isn’t ready to officially claim such a boast. That will come in the OTT company’s next announcement, he said.
Another announcement due to come from Pluto, according to Shultz: A partnership with a cable operator looking to cut its losses in the video business.
“Yes, we will have deals to announce in the near future on that,” Shultz said. “You take a service like Pluto, with no wholesale costs, and the more people who watch more money we make—that’s a good option [for MVPDs]."
As far as subscription vMVPDs are concerned, Shultz said he doesn’t believe that the economics will improve for any of them, once they achieve scale and content costs decline. “If content costs did improve for YouTube TV, Google would just lower the subscription price,” he said.
Founded in 2014, Pluto TV claims to have an audience of 6 million monthly watchers. According to the company’s Crunchbase profile, it’s backed by investors including Sky, Scripps Networks, United Talent Agency and Universal Music Group to the tune of $43.5 million.