Jan 22, 2019
In memo to employees, Viacom President and CEO Bob Bakish calls the announcement, “a big move in the evolution of Viacom.”
Earlier today, Viacom announced an agreement to acquire Pluto TV, a popular and rapidly growing ad-supported streaming platform. In tandem with the announcement, Viacom President and CEO Bob Bakish circulated the memo below to employees.
"I’m very excited to share with you a big move in the evolution of Viacom. Today we are announcing that Viacom has agreed to acquire Pluto TV, the leading free streaming television service in the U.S.
As we’ve discussed before, the video marketplace continues to evolve, with offerings segmenting by price point. Pluto TV is the leading platform to serve the marketplace at the free price point, and its acquisition allows Viacom to directly participate in this important segment, benefiting Viacom, Pluto TV and our collective partners. And, while Pluto TV is very U.S.-centric today, the opportunity is definitely global.
Before I get into the strategic rationale further, let me first tell you more about Pluto TV:
- Pluto TV features 100+ linear channels, supplemented by a video-on-demand library of 5,000+ hours, all available on its free, ad-supported platform (check out the video below to see it come to life!)
- Its content includes a broad array of genres across movies, news, sports, general entertainment and more
- This content is sourced from 130+ partnerships with media networks, major film and television studios (including Paramount Pictures), and a wide range of digital content producers
- Pluto TV is available across devices, including on mobile, smart TVs, desktops, streaming players and game consoles; in fact, it’s the #2 free app on Roku
- Pluto TV is also deeply integrated with a growing number of smart TVs, game console manufacturers and other devices, including Samsung and Vizio
As of year-end, Pluto already had more than 12 million monthly active users, 7.5 million of whom are enjoying Pluto TV on connected TVs. And this user base is growing quickly – Pluto added over 3 million connected TV users in the fourth calendar quarter alone.
But what’s really exciting is how Pluto TV fits into and accelerates Viacom’s strategy, and vice versa. Let me specifically highlight six key points:
1. PLUTO TV GIVES VIACOM A SCALED D2C OFFERING
- Gives Viacom direct access to millions and millions of consumers
- Serves as a very important marketing engine to acquire and retain consumers for Viacom’s targeted subscription products, like Noggin, Comedy Central Now, and soon others
- Provides a new distribution outlet for Viacom Digital Studios’ content, beyond the existing AwesomenessTV channel on Pluto TV
- Gives us the ability to promote our brands and content that live on other platforms, such as pay TV, theaters and beyond
2. MEANINGFULLY ENHANCES VIACOM’S ADVANCED MARKETING SOLUTIONS
- Immediately adds billions of high-quality addressable advertising impressions, which will further strengthen our ability to serve advertisers and their agencies
- Brings an additional audience that is young, gender-balanced and hard to reach
3. ADDS AN IMPORTANT OFFERING FOR DISTRIBUTION PARTNERS
- Further grows the scope of how we partner with our distributors by adding a premium, free service to provide value to broadband-only and other subscribers
- Serves as a customer acquisition and retention tool for certain tiers of pay-TV packages
- Represents a significant opportunity for all types of distributors, including mobile operators
4. UNLOCKS VIACOM LIBRARY VALUE
- Creates an additional opportunity to monetize Viacom library product; importantly, Viacom’s current-window programming will remain in the pay-TV ecosystem on our branded networks
- And, since we made the strategic decision two years ago to curtail the licensing of large library packages to SVOD, we have lots of content to work with
5. CREATES A GLOBAL OPPORTUNITY
- We will leverage our international reach, infrastructure and capabilities to expand the Pluto TV brand
- In particular, we see a very compelling near-term opportunity in the Spanish language space, both in U.S. Hispanic and Latin America
6. ACCELERATES PLUTO TV’S LEADERSHIP IN FREE STREAMING TV
- Viacom will strengthen Pluto TV’s content offering across key genres, including kids, African-American, reality and comedy
- Gives Pluto TV access to Viacom’s brands and marketing capabilities to grow audience and usage
- In turn, we believe we will deliver incremental value to Pluto TV’s existing content and distribution partners
Led by co-founder and CEO Tom Ryan, Pluto TV will operate as an independent subsidiary of Viacom upon closing of the transaction, which we expect in the first calendar quarter of 2019 (subject to customary closing conditions and regulatory approval, of course).
I hope you can see why this is such an exciting development for our company. We can’t wait for you to get to know the team and the product, as we unlock new value from our brands, IP and relationships all around the world, taking another meaningful step in accelerating the evolution of Viacom.
Thank you to everyone who helped make this deal happen and we look forward to welcoming the Pluto TV team to Viacom!"