Apr 23, 2019

Deals with T-Mobile, Charter, Apple, and others—plus the Pluto TV acquisition—show how audience fragmentation can become an opportunity.

New digital platforms and services haven’t just changed how consumers watch television—they’ve fostered creativity and collaboration in negotiations between distributors and publishers.

This has been evident over the past few months, as Viacom has formed a handful of new partnerships with major distributors—including Charter, Apple, fuboTV, T-Mobile, and AT&T—to make its content available for live and on-demand viewing across platforms. The deals signal an interest in being a flexible partner to audiences and distributors alike, ensuring that fans of its programming from flagship brands like Nickelodeon and MTV have more ways to watch than ever before.

Along with these deals is Viacom’s $340 million acquisition of Pluto TV, its largest distribution gambit to-date. The move, announced in January, positions the conglomerate as both a content producer and direct-to-consumer distributor. The free-to-stream, ad-supported Pluto TV platform will carry more than 10 Viacom-branded channels beginning in May.

“Audiences are more fragmented than ever so we need to continue to find ways to leverage our core competency of creating compelling, breakthrough programming. We need to reach our target audiences at every price point and on every platform they’re on,” says Tom Gorke, EVP and head of distribution and business development for Viacom. “There are audiences who are on Pluto and some of the other free platforms who may never subscribe to pay TV. We need to reach them with our brands and our IP.”

“New platforms typically skew younger, so if Viacom wants to reach people under 40 they should be on these new screens. Also, this age group is the most valuable advertising demographic,” says Laura Martin, a senior analyst at Needham & Company.

Viacom isn’t alone in this push to make its content more accessible, as consumers spend less time watching cable and more time—and money—streaming content. Some companies, such as Disney, WarnerMedia, and Apple, are preparing to launch their own subscription-based streaming services, while others, namely Comcast’s NBCUniversal and Amazon, are working on standalone ad-supported streaming services.

A ‘foundational partner’ for distributors

Viacom’s strategic distribution shift has been a calculated effort over the last two years. As CEO Bob Bakish said earlier this year, the company has gone from producing content only for Viacom channels to becoming a “global content production machine” that’s creating content “for any platform or channel in our increasingly content-hungry world.” The fruits of this shift include the Netflix hits To All The Boys I’ve Loved Before and The Haunting of Hill House, the Emmy Award-winning The Alienist that airs on TNT, and an upcoming Real World reboot for Facebook Watch.

The list of its content distribution deals inked in the last two quarters is long.

Earlier this month, the company announced that its popular brands will be featured on T-Mobile’s new mobile video service available later this year. The deal will bring together linear feeds of Viacom channels, as well as a broad range of on-demand content for T-Mobile’s nearly 80 million customers.

DirecTV Now’s new Plus and Max skinny bundles will also Viacom networks. DirecTV Now is one of four vMVPDs that include Viacom content, including Sling, Philo, and the recently added fuboTV. As announced earlier this year, fuboTV offers Viacom’s core networks as part of its base package and an expanded suite of Viacom channels in its premier package.

Also on the OTT side, AT&T announced earlier in April that MTV, Nick, VH1, and TV Land will be included in the $15-a-month AT&T Watch TV live service. Additionally, Viacom reached a deal with Charter in February to feature Viacom brands on Charter Spectrum Essentials, which is available exclusively for Spectrum Internet-only customers for $14.99 per month. And Apple announced in February that Viacom subscription channels such as Noggin, along with Starz and CBS, would be featured on its Apple TV lineup, ahead of the launch of the new service, Apple TV Plus, set to come sometime in the fall.

“We need to play in the sub-$10 market. And we need to play in the $15-to-$20 dollar market,” explains Gorke. “In some of these offerings, such as the Charter Spectrum Essentials, we're a foundational partner. We’ll reach its broadband-only subscribers with a $15 package that is all about entertainment programming.”

Viacom has “successfully expanded our presence on next-generation distribution platforms through our strong industry relationships and must-have content,” Bakish wrote on LinkedIn in December. “We continue to create products at a broad range of price points and bring audiences more flexibility and choice, vividly demonstrating that in a segmenting distribution landscape, Viacom is more important than ever.”

How the Pluto TV deal fits in Viacom’s strategy

Pluto adds another “option to our arsenal” when it comes to working with distributors, according to Gorke. “Pluto provides a cost-free way to work with Viacom to bring great content to broadband, mobile, and even existing pay TV subscribers. It extends to the free space our goal of reaching customers across all segments and price points and also provides an on-ramp to paid services.”

The distribution opportunities from the acquisition of Pluto TV will soon be noticeable to the platform’s 15 million monthly active users. Five Viacom brands (MTV, Comedy Central, BET, Nick, and Nick Jr.) will have at least one channel on Pluto TV come May, with some having additional niche channels unique to the platform. There will also be franchise-focused channels ahead, including a pop-up channel devoted to The Hills to promote the series’ revival airing on MTV this summer. The branding of the channels will allow Viacom networks and Pluto TV to get a boost of brand affinity from the efforts all while reaching an incremental audience.

“I think it’s excellent,” Martin says of Viacom’s acquisition of Pluto TV. “By buying Pluto, Viacom moved to the front of the OTT strategy line because Pluto is already in the market today. And Pluto is ad-driven, which is a different strategy from the plethora of competing, subscription fee-based streaming services."

Photo credit: Dina Litovsky. Pictured L to R: John Curbishley, SVP, Distribution Strategy and Operations; Deena Demasi, EVP, Content Distribution; Tom Gorke, EVP, Head of Distribution and Business Development; and Samantha Cooper, EVP, Content Distribution Partnerships.