Viacom is planning to launch a direct-to-consumer video product by the end of its fiscal year, and the company took some time today to offer a few details about the service.
Viacom CEO Bob Bakish, speaking during the company’s fiscal first-quarter earnings call, was careful to position the direct-to-consumer service as complementary to MVPD offerings. The comment came after he said Viacom spent a good deal of 2017 rethinking the way it works with and negotiating carriage deals with MVPDs.
Viacom CFO Wade Davis said the company couldn’t fully announce the direct-to-consumer offering, but he did say that full announcement would come soon. He added that the service will be “significant and differentiated from what’s in the marketplace today.”
Davis said the service will initially be rolled out in the U.S. and that it will feature “10s of thousands of hours” of content that pull from Viacom’s global library.
“It’s important to note that one of the reasons we’re able to do this is because we’ve chosen to curtail the amount of content that we license into third-party D2C experiences. That’s a decision that we made when [Bakish] rolled out his strategic plan last year. And although that’s had some short-term pain for us … it’s really important that we’ve built that library to be able to use for our own strategic purposes and fuel offerings like this,” said Davis.
Davis said that the direct-to-consumer product will be fundamentally different than traditional MVPD offerings and that at least one of Viacom’s MVPD partners is considering integrating Viacom’s upcoming streaming service into its broader pay TV product.
Davis said that any investment that Viacom makes in launching its direct-to-consumer product is already embedded in the company’s guidance.
In terms of mobile streaming deals, Viacom built the conversation today around its recently announced mobile streaming deal with Telefonica in Latin America. Bakish said the deal is based on a revenue per subscriber model, which he said is comparable to traditional pay TV deals. And he anticipated more deals like it are on the way.
“It’s really the first in what we believe will be a series of many where we unlock that platform to drive incremental reach for our brands and incremental monetization,” said Bakish. “It’s worth noting that we’re in numerous conversations similar to this all around the world and we’re in conversations with multiple carriers within the U.S.”
He said that mobile distribution deals are the “point that upend the whole argument of the decline of pay TV,” since mobile is such a ubiquitous platform and carriers are all looking for video offerings to help them differentiate.
“I’m thrilled to be talking about Telefonica but it’s really the tip of the iceberg,” said Bakish.