In the fast-growing firmament of streaming services, Pluto TV has shone only a bit brighter than the distant dwarf planet for which it is named. But it could become a star for ViacomCBS as the mid-sized media company reorganizes post-merger and pivots toward a new universe of audience expectations.
The erstwhile Viacom bought Pluto TV in early 2019 for $340 million as part of CEO Bob Bakish’s strategy to layer digital acquisitions atop its portfolio of basic-cable brands and Paramount Pictures.
Viacom then merged with CBS and began slimming down, with several rounds of layoffs and executive departures, new corporate structures and plans for a “house of brands” strategy to overhaul the suddenly underpowered CBS All Access subscription service.
That strategy would house content from all the organization’s many film and TV units, giving it at least a puncher’s chance of staying in the ring against much bigger competitors. ViacomCBS executives have dropped several clues about the new service but few specifics, (it’s promised for this summer).
Based on what they’ve said so far, expect something roughly similar to just-launched HBO Max and Peacock, which are both everything-but-the-kitchen-sink services, and planned free, ad-supported tiers.
Pluto TV could be vital to the subscription service’s success. Not only can Pluto TV carry promotions and “barker channels” for the SVOD offering that will funnel viewers there, it may make up for the giant hole in ad revenues hitting the parent company’s more traditional video units.
With advertisers shut out of the subscription services, they may look to shift some dollars to Pluto TV and its competition.
As it is, Pluto TV already drives about 22 million views a month, offering 250 live, linear and on-demand “channels” organized around content types and genres. That puts it behind only Tubi, which Fox just acquired, in viewership among the free, ad-supported channels.
They’re all going to be competing increasingly for viewer attention and extended reach on connected TVs and streaming devices, especially if the economy remains weak, predicts Forrester principal analyst Jim Nail.
Spending-conscious consumers are already making choices regarding traditional pay-TV, sending subscription rates plummeting at record rates this spring, Nail said. Viewers are shifting to multiple SVOD services, then augmenting their programming “menu" with Pluto or other ad-supported services.
“So far, the idea of a streaming war has been in the minds of the industry, the media, and, yes, analysts,” Nail said. “But the Q1 Disney/Netflix results show that consumers don’t see it as a zero-sum game—at least not yet… Look for pricing wars and promotions to break out as each player fights for share in this critical mainstreaming phase of adoption.”
In a true streaming war, Pluto and its direct competitors could be well positioned as the viewing destination for a significant audience.
The company has made a string of moves to get ready for that war. It recently added CBS Sports HQ, one of several live sports and news streaming services from the parent company’s “other side.”
It also is expanding its reach to new platforms, announcing a deal with Tivo and the Tivo+ streaming channel, and with Verizon, which could become increasingly important as Verizon rolls out its 5G high-speed mobile network.
Mobile and even in-home wireless broadband on 5G could become a big viewing option in the next year or two. The Verizon deal also puts Pluto on connected-TV service Stream, and its pay-TV bundle through FIOS.
Pluto announced its biggest product update in years, called Project Venetia, and a $30 million marketing campaign emphasizing its free price and ease of use. Those changes, announced just before the pandemic and lockdown hit the United States, enhance access to premium content through Pluto and improve navigation to favorite channels and genres.
And in late April, the company announced two big hires, whose pedigrees suggest directions Pluto may need to embrace as its develops.
One was the hiring of Shampa Banerjee from Bollywood streaming giant Eros International to be the company Chief Product Officer. Pluto already has operations in Europe and is rolling out in South America, but more generally, international markets will be vital for growth, especially in a vast market such as India.
The other big hire was Scott Reich as senior VP of programming. Reich most recently was at general manager at Fullscreen, the online content and management unit at Warner Media. Reich, whose background also includes executive stops at Vevo, Fuse, Concert.TV and Viacom’s own VH-1.
He’ll be charged with figuring out a programming strategy that not only connects to ViacomCBS’ in-house brands but also with the dozens of other content partners that Pluto showcases, along with any potential new opportunities mining the online video worlds where Fullscreen has operated for years.
All of which adds to the perception that pretty much everything ViacomCBS is doing right now is in transition. That’s because, more than just about any media company out there, everything is changing:
> The company is still slimming down post-merger, with more layoffs and restructuring.
> It’s dealing with record levels of cord-cutting, plummeting ad income in cable and broadcast, a halt to nearly all film and TV production, and a battered film-distribution sector.
> And the arrival of Disney Plus, Apple TV Plus, Peacock and HBO Max highlighted the need to dramatically rebuild CBS All Access and make it more competitive.
All that change also means the opportunity for Pluto to acquire a new shine for ViacomCBS, and the potential to become a real star in the streaming universe.
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