Xumo could be the next AVOD to be acquired

History Channel Xumo
Sinclair is reportedly one of the companies interested in buying ad-supported streaming service Xumo. (Xumo)

After Viacom made waves earlier this year with its $340 million purchase of ad-supported streaming service Pluto TV, another AVOD may get snatched up soon.

According to Variety, Xumo is being circled by some potential buyers including Sinclair. Neither Xumo nor Sinclair would confirm the discussions to the publication.

For Sinclair, a move to buy Xumo would deepen its ongoing efforts around ad-supported streaming. After last year putting a managing team in place, Sinclair earlier this year officially launched STIRR, a free, ad-supported streaming service that includes local programming, national news, entertainment, sports and an on-demand library.

“Despite the explosive growth of new national over-the-top (OTT) services, local TV station’s programming, especially local news, has remained some of the most popular and desired content to audiences and advertisers alike,” said Adam Ware, STIRR’s general manager, in a statement.

In Xumo, which last year reported a 325% rise in viewership and a 90% increase in user consumption, Sinclair would have another platform it could use to amplify its local news and other programming.

RELATED: Viacom says Pluto TV deal is a $1B ad revenue opportunity

Rumors of Xumo’s sale come as more companies are sniffing around the ad-supported streaming market. NBCUniversal is planning to launch an ad-supported streaming service early next year, while Amazon-owned IMDb recently launched its own ad-supported streaming service called Freedive.

And of course, Viacom recently acquired Pluto TV.

During Viacom’s most-recent earnings call, CFO Wade Davis said the Pluto TV deal would create value for the company at multiples of the purchase price. He said that, in the ad space alone, Pluto TV is a $1 billion opportunity. That total likely reflects the chances to grow ad sales for Pluto TV.

“Pluto TV audience is young, gender-balanced & hard to reach—in fact, 50% of Pluto TV viewers are between the ages of 18 & 34. Importantly, Pluto TV—w/ its nascent ad sales force—currently sells less than 50% of this inventory, so there’s plenty of upside here,” said Viacom CEO Bob Bakish.