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ViacomCBS to Launch Broad Pay Streaming Offering

About three months after completing the merger that created ViacomCBS, the programming giant said it will launch a broad pay “House of Brands” streaming product, building on the foundation of its popular CBS All Access offering and complementing its other existing Pluto TV and Showtime streaming video products.

ViacomCBS said the new offering will expand CBS All Access by adding its scaled assets in film and television through on-demand and live experiences. The streaming service will have partnerships with traditional and new distributors — none of which were identified yet — both domestically and internationally.

News of the new streaming offering comes as ViacomCBS reported Q4 earnings, with revenue down 3% to $6.9 billion and adjusted OIBDA down 32% to $1.2 billion, compared to the prior year. Advertising revenue also was down 2% in the period, including a 1% decline domestically as international ad sales dropped 10%. For the full year, ad revenue was up 2%, as a 5% increase in domestic ad sales offset a 14% dropoff in international ad revenue.

“In less than three months since completing our merger, we have made significant progress integrating and transforming ViacomCBS,” CEO Bob Bakish said in a press release. “We see incredible opportunity to realize the full power of our position as one of the largest content producers and providers in the world. This is an exciting and valuable place to be at a time when demand for content has never been higher, and we will use our strength across genres, formats, demos and geographies to serve the largest addressable audience, on our own platforms and others.”

ViacomCBS also offered guidance for 2020, with overall revenue expected to rise in the mid-single digits as domestic streaming and digital video sales rise 35% to 40% for the year. Adjusted OIBDA should reach $5.8 to $6.1 billion(up from $5.5 billion in 2019) in 2020, with earnings per share of between $5.15 and $5.50 per share, up from $5.01 per share in 2019. Free cash flow should rise to between $1.8 billion and $2.01 billion in 2020, up from $1.2 billion in the prior year.

ViacomCBS also predicted it would add 5 million domestic streaming subscribers in 2020, reaching 16 million customers by the end of the year. The company also expects to end 2020 with 22 million monthly active users (MAUs) at its ad-supported streaming service Pluto TV, an increase of 8 million.

In a research note, Evercore ISI media analyst Vijay Jayant wrote that the 2020 guidance was mixed, adding that the company’s revenue and earnings per share estimates were below his forecast, while adjusted OIBDA and free cash flow predictions were in line.