With cable networks losing subscribers, Viacom is jumping into the streaming business by buying Pluto TV for $340 million in cash.
Without local broadcast stations or sports rights, Viacom has had little leverage with traditional distributors and new virtual distributors have balked at carrying all of its networks. Under new CEO Bob Bakish, Viacom has focused on a handful of what he termed flagship networks, including MTV, Comedy Central, BET, VH1, Nickelodeon and Nick Jr.
Pluto TV is a free, ad supported streaming TV service that offers more than 100 channels. It has more than 12 million monthly active users, with 7.5 million of those users on connected TV.
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Pluto TV is available via Roku, Amazon Fire TV, Android TV, Apple TV, Chromecast and Sony Playstation consoles. It is also built into smart TVs from Samsung and Vizio and has new distribution deals that will make it available on 10s of millions of additional devices in the coming months, Viacom said.
Acquiring Pluto TV puts Viacom in the streaming pool at a time when rivals AT&T, Disney and Comcast’s NBCUniversal are planning new direct-to-consumer offerings. All of those companies will be taking on established streaming powerhouses including Netflix, Hulu and Amazon Prime Video, not to mention an upcoming TV service from Apple.
It was unclear how acquiring Pluto TV affects the possibility that Viacom will be combined with CBS Corp. Both companies are controlled by the family of media mogul Sumner Redstone and his daughter Shari Redstone.
“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.
“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,” Bakish said. “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.”
Viacom said that in addition to providing Viacom with a presence in a new distribution platform and growing its advanced advertising business, Viacom will be able to buttress Pluto TV’s position among the leaders in free streaming video in the U.S. and expand it globally.
Pluto TV could also provide Viacom the chance to work with existing distributors to create premium broadband services for subscribers.
The new distribution service will also help unlock the value of Viacom’s library. The company said its current window programming will remain in the pay-TV ecosystem on its branded networks.
Pluto TV CEO and co-founder Tom Ryan will continue to serve as CEO of Pluto TV, which will operate as an independent subsidiary of Viacom after the deal closes. The deal is expected to close later this quarter.
“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," said Ryan. "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.”
