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In September, Paramount’s Pluto TV became the first free, ad-supported platform to crack the Nielsen Gauge, the ratings provider’s monthly, all-platform snapshot of TV use. The platform reached 1 percent of all TV viewership in the U.S. for the month, coming in just below HBO Max and ranking among other paid streaming services. The milestone was a coup for Pluto TV but not entirely surprising, says Tom Ryan, head of streaming at Paramount, given the platform’s longevity and content offerings. “I do think that this is the beginning of Pluto being broken out as one of the top players in engagement for U.S. connected TV,” Ryan tells The Hollywood Reporter.
Pluto TV was founded in 2013, several years before competitors including The Roku Channel and Amazon’s Freevee. After Pluto TV was acquired in 2019 by ViacomCBS (rebranded to Paramount Global), it gained preferred access to the CBS library, which has been a key differentiator for the platform. Last year, Pluto TV brought in more than $1 billion in revenue, just below the annual revenue for Paramount’s paid streaming service, and reported 4.8 billion total viewing hours across the year. (In that same time period, Fox’s free streaming service, Tubi, reported 3.6 billion total viewing hours, for comparison.) The company is on track to reach 100 million to 120 million monthly active users globally by the end of 2024, Ryan says, after hitting 72 million in the third quarter. (Paramount+ reported 46 million subscribers in the third quarter.)
Ryan attributes the rise in viewership at Pluto TV to its early start in the FAST (free ad-supported streaming TV) field, which allows the company to better monetize a large user base and invest in more content, as well as its corporate ownership. CBS programming is the primary driver of engagement on the platform, with high viewership for NCIS, 60 Minutes, CSI channels and for new episodes of primetime shows. Pluto TV plans to triple its on-demand CBS offerings and to add Frasier, Cheers and more Star Trek channels by the end of 2022.
Pluto’s growth comes alongside an overall rise in viewership for ad-supported platforms, as content offerings improve and as consumers look for less pricey alternatives to having multiple paid streaming services. According to a survey from TiVo, FAST and ad-supported nonpaid streaming services made up 22 percent of all viewing time among respondents in the U.S. and Canada in the second quarter of 2022, up from 10 percent in the fourth quarter of 2021.
The ideal programming for FAST TV is large franchises that have a high volume of content and self-contained episodes, Ryan says. This allows viewers to tune in at any time and encourages bingeing. Pluto TV has capitalized on it by creating many channels that are specific to the platform and dedicated to just one show, such as the Tosh.0 channel. “It has more options for bingeability compared to other FAST services,” says Kevin Tran, media analyst at Morning Consult. That’s one reason Pluto TV has stayed away from original content, even as rivals, such as The Roku Channel, which is releasing its original film, Weird: The Al Yankovic Story, in November, move further into the space. “I would never say never, but I don’t believe that, today, the FAST market can support original programming in a very successful manner,” Ryan says. The expense of producing and marketing original content is too high, and the rate of success is too low, according to Ryan. And since original content is more limited in scope than an older franchise, for example, it does not help with viewing hours, the focus for a FAST platform.
“I think there’s a lot of players out there who are applying the [streaming video on demand] originals model to the FAST space, because they don’t have the third-party flywheel nor the first-party content advantage that we have as Pluto TV,” Ryan adds.
Consumers are still not as educated on FAST offerings as they are with subscription services, and the launch of an original could help draw in new viewers and differentiate the service. However, given its trajectory and breadth of content, Pluto TV may monitor the results of competitors and decide it does not need to take that step, Tran notes.
Within Paramount, Ryan said he views Pluto TV as complementary to Paramount+. Having the two services allows the company to promote and air select Paramount+ content on the free service, in the hopes of converting subscribers. If a user leaves the paid service, Ryan hopes to keep them within the company’s streaming landscape by offering the free service. “We really are focused on making the one plus one of free and paid streaming equal three,” he says.
Ryan’s next step is growing Pluto TV’s international presence — the platform is currently in more than 30 markets after launching internationally four years ago — as well as its domestic lead. While churn remains an issue in the FAST space, due to the ease of switching between platforms, the proposition of a free service is likely to bring more in consumers going forward, particularly if the economy worsens.
“They are capturing a good chunk of consumer’s time and viewing behavior,” Michael Goodman, director of digital media strategies at Strategy Analytics, says of the market potential for FAST channels, adding, “And given the almost nonexistent barrier to entry, I only anticipate this to grow in the future.”
A version of this story first appeared in the Nov. 2 issue of The Hollywood Reporter magazine. Click here to subscribe.
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