Viacom’s $340 Million Acquisition Of Pluto TV: The Details You Need To Know

By Amit Chowdhry ● Jan 26, 2019

Viacom, the broadcasting and media giant that owns channels like Nickelodeon, MTV, VH1, and Comedy Central, announced that it is acquiring streaming video platform Pluto TV for $340 million in cash this past week. Pluto TV had raised over $50 million in funding across six rounds prior to the acquisition, according to Crunchbase’s data.

Launched in 2013, Pluto TV offers streams for over 100 channels and thousands of hours of on-demand content. Pluto TV sources the content from over 130 partnerships with media companies and film/TV studios. And Pluto TV splits advertising data with networks for the programs. For example, Pluto TV’s live channels include CNBC, CBS News, NBC News, Bloomberg, and Cheddar TV. Pluto TV has a number of on-demand movies and TV shows on its platform.

At the time of the acquisition, Pluto TV was hitting more than 12 million monthly active users, of which 7.5 million were on connected TVs. Pluto TV’s audience streams billions of minutes of content every month across devices like the Roku, Amazon Fire TV, Android TV, Apple TV, Chromecast, Sony PlayStation, iOS, Android, and integrations with smart TVs made by Samsung and Vizio. Plus Pluto TV secured new distribution deals that make the service available on tens of millions of additional devices in the coming months.

With the acquisition of Pluto TV, it will advance Viacom’s strategic priorities such as expanding its presence across next-generation distribution platforms and to grow its advanced advertising business. Pluto TV is also expected to become a leader in the free streaming video market in the U.S. with access to Viacom’s global reach, brands, and extensive library of content.

Pluto TV will also become a marketing engine to acquire and retain consumers for Viacom’s subscription products including Noggin and Comedy Central Now. And Pluto TV will provide an additional distribution outlet for Viacom Digital Studios’ content beyond the existing AwesomenessTV channel.

One of the immediate benefits is that the platform offers billions of high-quality addressable advertising impressions, which will strengthen Viacom’s ability to serve advertisers and agencies. And it brings an additional audience that is young and gender-balanced.

Through Pluto TV, it also creates an incremental opportunity to monetize Viacom’s library product. And Viacom’s current-window programming will remain in the pay-TV ecosystem on its branded networks. This benefits Viacom’s strategic decision to reduce the licensing of large library packages to subscription video on demand services over the last two years. For example, you will not find Viacom’s content on platforms like YouTube TV or Hulu with Live TV.

“Since our launch less than five years ago, and particularly over the past year, Pluto TV has enjoyed explosive growth and become the category leader in free streaming television,” said Pluto TV co-founder and CEO Tom Ryan in a statement about the deal a few days ago. “Viacom’s portfolio of global, iconic brands and IP, advanced advertising leadership and international reach will enable Pluto TV to grow even faster and become a major force in streaming TV worldwide. Viacom is the perfect partner to help us accomplish our mission of entertaining the planet.”

Following the acquisition, Ryan will continue to be CEO of Pluto TV. Pluto TV will operate as an independent subsidiary upon the closing of the deal. The deal is expected to close in the first quarter of 2019 and it is subject to customary closing conditions and regulatory approval.

Paul Hastings of Covington & Burling and Shearman & Sterling served as Viacom’s legal counsel in this deal. And law firms Gunderson Dettmer and Hogan Lovells served as legal counsel to Pluto TV. And LionTree Advisors was the financial advisor to Pluto TV.

“Today marks an important step forward in Viacom’s evolution, as we work to move both our company and the industry forward. Pluto TV’s unique and market-leading product, combined with Viacom’s brands, content, advanced advertising capabilities and global scale, creates a great opportunity for consumers, partners and Viacom,” added Viacom president and CEO Bob Bakish. “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. To that end, we see significant white space in the ad-supported streaming market and are excited to work with the talented Pluto TV team, and a broad range of Viacom partners, to accelerate its growth in the U.S. and all over the world.”

Due to the exponential growth of cord-cutting, media companies have been making very aggressive deals. For example, AT&T bought Time Warner for $85.4 billion. And Disney outbid Comcast to buy Fox for $71.3 billion. And Viacom has been supporting streaming platforms by having its properties create content for Netflix and Facebook Watch. But last year, Viacom said it would launch a streaming platform with “tens of thousands of hours of content.”