Viacom announced Tuesday that it will pay $340 million for streaming start-up Pluto TV.
Founded in 2013 and privately backed with $51.8 million in funding to date from investors including Scripps Networks Interactive, Sky and Samsung Venture Investments, Los Angeles-based Pluto TV is an ad-supported, free-to-consumer streaming service, delivering a range of digital channels in the searchable format of a traditional linear TV programming guide.
According to Tuesday’s announcement, Pluto TV is averaging 12 million engaged viewers a month. The Pluto TV app is available across a range of living-room OTT and mobile devices. But the company’s most important distribution end point is smart TVs, where it competes with add-supported platforms like Roku, Xumo and Tubi TV to be the native streaming app folks see when they first turn on their set. About 60% of Pluto TV’s viewing comes from smart TVs.
In fact, Pluto TV has a deal with Vizio for integration into the manufacturer’s WatchFree streaming service.
Like all media conglomerates these days, Viacom is looking to monetize its networks and shows via streaming without licensing them to Netflix and Amazon, and helping those subscription platforms grow even bigger and more powerful.
Rivals including Disney and WarnerMedia are pursuing similar objectives by launching new subscription streaming services of their own. But there’s a growing sentiment in the OTT business that consumers are almost out of wherewithal to take on additional monthly bills for TV services.
Meanwhile, advertising-based video on demand (AVOD) services are growing fast. Roku, for example, says it now has a monthly audience of 27 million for its platform, with many of those users watching the AVOD-based Roku Channel.
After enduring a turbulent stretch in which its linear viewing declined steeper than most of its rivals, Viacom has been steadily building its digital business through acquisitions, which includes the $25 million purchase of digital video brand AwesomenessTV last summer.
Viacom is also making investments into advanced advertising. Two weeks ago, it announced that it had joined Comcast and Charter Communications in developing a blockchain-enabled exchange for addressable advertising data.
With Pluto TV, Viacom has a ready-made audience to stream content from channels ranging from AwesomenessTV to MTV to Comedy Central, using its ad tech to further monetize the effort. Further, it can drive sign-ups to subscription streaming businesses it has been gestating, Noggin and Comedy Central Now.
The deal is expected to close later in the first quarter. Pluto TV co-founder and CEO Tom Ryan will remain on as the company transitions.
“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 Viacom CEO Bob Bakish 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.”
Added Ryan: “Since our launch less than five years ago, and particularly over the past year, Pluto TV has enjoyed explosive growth and become the category leader in free streaming television. Viacom’s portfolio of global, iconic brands and IP, advanced advertising leadership and international reach will enable Pluto TV to grow even faster and become a major force in streaming TV worldwide. Viacom is the perfect partner to help us accomplish our mission of entertaining the planet.”