Earlier this year, Viacom made a huge move when it acquired Pluto TV, a streaming start up that launched five years ago. To the delight of its viewers, dozens of shows and programs have been added to their TV lineups, and all at no added cost to their subscriptions. Pluto TV is essentially an ad-supported, free-to-consumer streaming service that delivers a wide variety of content categories and channels in a traditional linear TV format. The service now has over 18 million subscribers.
As for why the future is bright for TV viewers with this latest venture, Viacom CEO Bob Bakish said in a statement, "As the video marketplace continues to segment, we see an opportunity to support the ecosystem in creating products at a broad range of price points, including free." In an interview with NCTA, Pluto TV CEO Tom Ryan echoed Bakish's sentiment. "What is absolutely true is that there is a limit to what people are willing to pay for streaming services. As a result, Pluto TV really is a complementary product to any paid streaming TV service, whether it be SVOD or skinny bundle," said Ryan. The service allows subscribers to add over 150 high quality curated channels to their self-created bundle, plus thousands of TV shows and movies on-demand.
So not only do viewers get a free streaming service, they also get to watch TV in the traditional linear format that many of them prefer in addition to their on-demand interests. In a Q&A, Ryan delved a little deeper into how the service plays an important role in today's TV marketplace, where TV might be headed, and why this new deal is ultimately a big win for consumers.
Give us an overview of how and why Pluto TV got started.
Ryan: At the time that this idea came about, there were a number of trends happening. There was a collective wisdom that in the world of streaming everything was moving to on-demand versus linear, and that people would not tolerate advertising and would pay subscriptions to watch content on an ad-free basis. But we looked at that from a different perspective and thought that there were a lot of things that traditional TV has done so well over the years that could be reimagined to live in the new digital/mobile landscape.
In terms of cable TV, it's given you a place to go with a variety of content that's curated into interest-based channels that run on a live basis so you can opt into a channel. It's like opting into a genre of programming. Viacom's channels are the epitome of that and really stand for something. Comedy Central, MTV, BET, and Nickelodeon all define the programming genres they are known for. We said, that works really well and people love it. People also like an electronic program guide—a grid because it makes channel surfing easy, and easy to drop into one of these genres of programming and let expert curators deliver great content to you.
On-demand is great when you know what you want to watch, but we've all been in that position where we scroll through a bunch of tiles for 20 minutes after a long day, and just give up because, at that moment, we just want to be entertained. But we're being asked to do a bunch of work. So we said, well linear is not going away as TV moves to the internet. In fact, we think it will remain a very important part of how people consume content. And we thought, let's take what TV does best and keep in mind that people are creatures of habit. We can't just throw away so many of the things that people have found so compelling about TV over the decades. We created a product that is free and instant, with curated, lean-back channels supported by advertising. It took some time for it to catch its stride, but over the last few years we've been growing rapidly. Now with Viacom supporting us, we see a completely different leg of growth ahead.
How did you end up teaming up with Viacom?
Ryan: I approached Viacom for a content licensing partnership, but as we got to know each other more, the conversation turned strategic and they expressed an interest in acquiring us. It was clear there was a lot of strategic alignment at the executive levels of both companies. From our perspective, we saw that Viacom could bring its world class channel brands, its thousands of hours of premium library content, its strong distribution resources, and its international footprint to help accelerate Pluto TV and extend our mission to entertain the planet and expand globally. From Viacom's perspective—and CEO Bob Bakish has spoken about this at length to the press many times—they saw the market segmenting. You've got traditional premium pay tv, skinny bundles, SVOD. There is this growing AVOD category that focuses on library content. Viacom wants to play in all of those segments, and they saw in Pluto TV a company that could help accelerate its speed to market and really give it a kick start into being a direct-to-consumer, scaled streaming player through an acquisition.
Tell us about some of the new ventures the two companies have delved into since the launch.
Ryan: Since the deal closed in March, we've hit the ground running—at Pluto TV we like to say, Warp Speed. Since April, we've launched 30 channels with Viacom. If you look through the dial you will see most or all of Viacom's marquee brands and its great library of iconic programming on Pluto TV. There's also a Pluto TV Latino offering so we have dozens of channels in Spanish and Portuguese for the U.S. Hispanic audience. We've teamed up with them on the distribution front announcing deals to bring Pluto TV to Comcast and Cox. We're live on Comcast and launching soon on Cox, and will have more MVPD deals to announce in the near future. And on the international front we are already expanding the content offering into Pluto TV's pre-existing German and UK offerings and looking to expand further in Europe. We announced we'll be bringing Pluto TV to Latin America with Viacom's strong presence there early next year.
We really came out of the gate after closing and have achieved incredible success together. The reaction from consumers has been extraordinarily positive. They're loving the new channels, they're loving the Viacom content.
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