Viacom announced this week that it is acquiring PlutoTV for $340 million in a deal that The New York Times calls “Viacom’s most significant move into streaming.”
The acquisition of the streaming service is part of what The Times says is “now the go-to strategy for media companies as more and more viewers forgo traditional cable subscriptions. The emergence of streaming services like Netflix and Hulu has hastened the decline of the pay TV business and has upended the media universe.”
The report notes the significance of the sale of Time Warner to AT&T and the sale of the bulk of Rupert Murdoch’s media empire to Disney. “The impetus for both deals was to create entities capable of taking on Netflix and other tech companies by offering their own streaming plans,” The Times reports. “AT&T and Disney will unveil their services by the end of the year.”
The report adds: “Viacom’s deal for PlutoTV, while much smaller, shares some of that motivation. PlutoTV, founded in 2013 and led by Kenneth Parks and Tom Ryan, is a free, advertising-based service and has about 12 million active viewers a month. NBCUniversal also announced this month that it would start a streaming service largely supported by advertising.”
The report notes that PlutoTV runs shows from Discovery and from Viacom’s AwesomenessTV, along with news content from several broadcast networks, including NBC and CBS.
“The start-up splits ad revenue with the networks,” The Times adds. “Mr. Ryan will remain chief executive and report to Viacom’s management team. Mr. Parks, who previously was one of the leading executives at Spotify, will step down as chairman.”