Viacom has recently held acquisition talks with two free, ad-supported streaming video services as it looks to expand the digital reach of its entertainment properties.
The media company approached with Tubi TV, a free service partly owned by MGM and Lionsgate; and Pluto TV, a Los Angeles-based company that has attracted investments from Scripps Networks Interactive, Sky, Third Wave Capital Partners and Samsung Venture Investment Corp., the venture-capital arm of Samsung.
It’s unclear whether these discussions will result in a deal, sources say. Pluto TV was exhibiting this week at the Consumer Electronics Show, where its executives have been touting its growth and $200 million annual run rate. One source said the company’s not for sale.
The Information first reported the acquisition talks, which Deadline independently confirmed.
Viacom CEO Bob Bakish has spoken publicly about positioning the company for an increasingly fragmented media landscape where one-size-fits-all cable bundles are fraying.
In remarks earlier this week at the Citi 2019 Global TMT West Conference, Bakish talked about Viacom’s variety of offerings in the direct-to-consumer space, from so-called “skinny” program bundles, like Philo, to niche digital offerings like Noggin, a preschool product that’s distributed through the Amazon channel store and on the Roku platform.
Viacom’s also busy developing programs for digital distribution, such as the reboot of the MTV reality series The Real World for Facebook Watch. Ad-supported VOD is another way to reach broad audiences with a free offering that could potentially entice viewers to purchase subscription products.
“We believe working with some of our distributors including in the AVOD space, ad-supported video on demand, both as a standalone product and as a funnel and entry point for an upgrade path of various subscription products, including potentially big bundle,” said Bakish at the Citi conference. “So, that’s the way we’re playing it. We’re doing it in a capital-light way. We’re not going to go out and spend X double-digit billion dollars acquiring a company.”
Viacom’s evolving digital strategy comes at a time of growing competition in the streaming space. Disney and AT&T’s WarnerMedia are both preparing to launch Netflix-like services later this year.
Some players, like Roku, Pluto TV and Tubi TV, are betting that consumers will be able to afford a limited number of subscription services, and will be looking to fill out their viewing with free TV programs.