Viacom is advancing its direct-to-consumer strategy by buying free, ad-supported streaming service Pluto TV for $340 million in cash.
Pluto TV CEO and co-founder Tom Ryan will stay on to run Pluto TV after the acquisition, which is expected to close in the first quarter of 2019.
Pluto TV livestreams channels and offers on-demand content from its more than 130 partnerships with media networks, film and television studios and digital content producers. The company said it currently counts more than 12 million monthly active users, 7.5 million of which are on connected TVs. Pluto TV is available on Roku, Amazon Fire TV, Android TV, Apple TV, Chromecast, and Sony PlayStation consoles; comes pre-installed on smart TVs from Samsung and Vizio; and is available on Android and iOS.
As for how the service fits in with Viacom’s current streaming strategy, Viacom talked up the added scale along with advertising and marketing opportunities.
Viacom gets direct customer relationships with all of Pluto TV’s users and the company can use that data and insights to market its subscription video products including Noggin and Comedy Central Now. The company also plans to use Pluto TV as a new distribution outlet for Viacom Digital Studios’ content, and as a way to promote Viacom brands and content across pay TV and theaters.
The advertising opportunity afforded Viacom by purchasing Pluto TV includes access to “billions of addressable advertising impressions” that Viacom can sell to advertisers and agencies.
Viacom said that Pluto TV also brings “an additional audience that is young, gender-balanced and hard to reach.”
Viacom is also looking toward partnering with distributors and integrating Pluto TV on other platforms including pay TV and mobile while also creating some incremental monetization for Viacom’s library content. The company was careful to note though that its current-window programming will remain in the pay-TV ecosystem on its branded networks. But the company sees the Pluto TV opportunity as a way to justify its decision to pull back on licensing its content to subscription streaming services like Netflix.
Looking outside the U.S., Viacom said there is a near-term opportunity to create a Spanish-language offering that uses Viacom International Media Networks’ library in both the U.S. and Latin America.
In terms of benefits for Pluto TV, the service will now get access to Viacom’s content across kids, African-American, reality and comedy, which could be used to grow audience, usage and incremental value to Pluto TV’s existing content and distribution partners.
“Today marks an important step forward in Viacom’s evolution, as we work to move both our company and the industry forward. Pluto TV’s unique and market-leading product, combined with Viacom’s brands, content, advanced advertising capabilities and global scale, creates a great opportunity for consumers, partners and Viacom,” said Bob Bakish, Viacom president and CEO, in a statement. “As the video marketplace continues to segment, we see an opportunity to support the ecosystem in creating products at a broad range of price points, including free. To that end, we see significant white space in the ad-supported streaming market and are excited to work with the talented Pluto TV team, and a broad range of Viacom partners, to accelerate its growth in the U.S. and all over the world.”