Following Viacom’s recent agreement to purchase advertising video-on-demand (AVoD) service, Pluto TV, for $340m, Joseph Dimmock, Technology Analyst at GlobalData, a data and analytics company, offers his view on the acquisition:
“Pluto TV currently offers more than 100 live TV channels as well as thousands of hours of on-demand content to its users. The platform is ad-supported, meaning users don’t have to pay for a subscription, a fact that Viacom will be able to use to leverage engagement with Viacom content by users who are looking for an affordable alternative to other direct-to-consumer services.
“Viacom will have access to Pluto TV’s 12 million monthly active users, helping to greatly scale Viacom’s existing direct-to-consumer business on a global scale. An AVoD solution also compliments Viacom’s existing, primarily subscription based, direct-to-consumer portfolio, by providing an additional route for consumers to access free video content.
“Looking at the bigger picture, acquiring Pluto TV is an important strategic move for Viacom. Video-on-demand has established itself as a serious challenger to traditional broadcasters and their competition has made subscription video-on-demand (SVoD) and AVoD platforms a crucial part of any broadcaster’s current and future product portfolio. Hence Viacom’s investment in an ad-supported, free-to-consume D2C business will help reinforce its consumer strategy and make it better equipped to compete with the likes of Netflix and Amazon on a global scale.
“Although only launched in 2013, Pluto TV has proven itself to be a serious player in a very competitive market. A recent study by Apptopia claimed that Pluto TV has been acquiring more new users than both YouTube TV and HBO Now since July 2013. This is impressive when YouTube’s digital prowess and HBO’s position as a content powerhouse are taken into consideration. Clearly, AVoD services akin to Pluto TV resonate well among a global audience, and thus make for a promising investment opportunity for Viacom.”