Pluto TV in Post-Sale ‘Growth Mode’

Viacom sees many synergies in its new AVOD platform
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After closing on its $340 million purchase of Pluto TV last week, Viacom will keep the free-to-consumer streaming platform, at least for now, as an independently operating subsidiary, with its 100 to 130 employees still housed at the Pacific Design Center in West Hollywood, Calif.

 Pluto TV’s mix of linear channels and on-demand viewing options should mesh well with new parent Viacom’s large programming library.

Pluto TV’s mix of linear channels and on-demand viewing options should mesh well with new parent Viacom’s large programming library.

“We’re in growth mode,” Pluto TV co-founder and CEO Tom Ryan, who will continue to lead the company, told Multichannel News. “We’re adding to the team quite aggressively, taking advantage of Viacom’s resources.”

Arguably the biggest ad-supported streaming operator, Pluto TV represents what Morgan Stanley analyst Ben Swinburne termed as a “relatively modest bet” for Viacom.

Rivals Starting From Scratch

The Walt Disney Co., WarnerMedia and NBCUniversal continue to build their own streaming platforms from the ground up. Like these rivals, Viacom is operating in an age when the sobered-up media conglomerates are reckoning with the self-inflicted competitive injuries from licensing so much content to Netflix over the last decade. But Viacom now has a readymade ad-supported video-on-demand platform with 12 million monthly users to work with. And there are readily apparent synergies.

As an entertainment-focused streaming platform that blends live-streamed channels with a robust selection of VOD content, Pluto TV’s audience is well-situated for a programmer like Viacom, largely bereft of sports.

And the Pluto TV audience is set to grow further, as its app is natively integrated into the user interfaces of Samsung and Vizio smart TVs — a pole position that puts the OTT platform “ahead of the app store,” as Ryan noted.

Pluto TV’s viewership is young, the kind of audience Viacom used to so effectively monetize in the halcyon days of linear cable networks like MTV, Comedy Central and Nickelodeon.

“In fact, 50% of Pluto TV viewers are between the ages of 18 and 34,” Viacom CEO Robert Bakish said in selling the purchase to investors last month. “Importantly, Pluto TV with its nascent ad sales force currently sells less than 50% of this inventory. So there’s plenty of upside here.”

As a well-backed startup, Pluto TV had effectively built a huge audience since its 2013 launch, but it would have needed to build out monetization mechanisms were it to continue as an independent company. “Viacom sells billions of dollars in advertising, and they have advanced-advertising capabilities,” Ryan said. “We have been growing rapidly in usage and revenue, but we are early in our monetization efforts.”

As he chatted with MCN while driving through the rainy streets of Los Angeles, Ryan felt somewhat restricted in discussing all of the detailed planning that’s ongoing in the nearby offices of his company’s new corporate masters.

“We’re in the middle of merger integration planning,” he said. “There are a lot of things we’re exploring together — a lot of things that not yet fully confirmed as plans.” Ryan couldn’t, for example, divulge the plans for specific Viacom content or networks. But in broader strokes, he noted, Viacom has “a treasure trove of well-known TV and movie content — a library that spans decades; tens of thousands of hours of content holding back over the years.”

Imagine the AVOD equivalent of, say, a TV Land or Paramount Network?

“The deal will unlock large library value for Viacom,” Bakish said during his first-quarter earnings call with investors on Feb. 5. “As you know, we made the strategic decision two years ago to curtail the licensing of large library packages to SVOD with our streaming service in mind. As a result, we have lots of content to work with.”

Thinking Globally

Meanwhile, both Bakish and Ryan speak fondly of the international expansion possibilities.

Ryan sees specific opportunities in regions like Latin America, an idea that seems to be on Bakish’s mind, as well.

“Pluto TV is a significant global opportunity,” Bakish said. “We will leverage Viacom’s reach, infrastructure and capabilities to expand Pluto TV globally. In particular, we see a very compelling near-term opportunity to create a Spanish language offering. We have very deep content assets, including Spanish-language versions of our Media Networks original [intellectual property], as well as Latin American originals, including from Telefe. We have very deep content assets, including Spanish-language versions of our Media Networks original [intellectual property], as well as Latin American originals, including from Telefe.”

Added Ryan: “There is a complete alignment of vision and ambition that the Viacom senior executive team has about the opportunity for streaming TV. They really want to make this a massive business.”

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