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Speaking during the virtual Evercore ISI Inaugural TMT (Technology, Media and Telecom) Conference, Bakish said when he told investors a few years ago that his team at what was then Viacom was expecting Pluto TV to hit annual advertising revenue of $1 billion down the line after $70 million in 2018, “everyone thought we were nuts.” He also shared that Pluto TV is currently trending toward crossing, in the fourth quarter of 2021, the $1 billion target on a full-year run-rate basis, adding that it is expected to “comfortably” exceed that figure for the year 2022.
“The road ahead is just tremendously compelling for this product,” including its further international rollout beyond the current 25 markets, and the company doesn’t get enough credit for it, the CEO argued.
Also on Monday, Bakish said that ViacomCBS can succeed in the streaming space in its current configuration despite big consolidation moves in the industry as of late and feels its advertising-supported Paramount+ streaming plan for $4.99 per month, which launched on Monday, can over time end up with higher average revenue per user than its ad-free $9.99 service. Discovery has also said that its cheaper Discovery+ streaming plans with ads is showing higher average revenue per user.
Questioned about the upfront advertising market, Bakish predicted that “our upfront is going to be off the hook,” citing strong scatter market trends going into it.
Asked during the Monday conference about recent megadeals, such as Discovery’s acquisition of WarnerMedia and MGM’s sale to Amazon.com, he said the key question was whether ViacomCBS can succeed in its current form and with its current size. “In short, the answer is definitely yes,” he said, citing three reasons: a “truly differentiated strategy, “ the firm’s “tremendous momentum” and the fact that the company is “one of the largest producers in the world.”
Bakish said the third is the source of a “rapidly growing slate” of exclusive streaming originals, which he said is what ultimately drives success in that business. And the CEO highlighted that ViacomCBS has the financial firepower to invest in content. Overall, Bakish concluded: “We have what it takes to succeed in streaming.”
Asked the same question about how he feels about ViacomCBS’ ability to compete in the streaming space amid industry consolidation, Bakish also told the company’s recent annual shareholder meeting that “we are one of the few companies” that has what it takes.
Also addressing mergers and acquisitions, ViacomCBS CFO Naveen Chopra said at a recent investor conference that the company would be opportunistic about potential deals as the industry consolidates, while adding there “aren’t any must-do deals” on the horizon.
Their comments came after Discovery said on May 17 that it would merge with AT&T’s WarnerMedia, bringing together such TV channels as CNN, TBS, TNT, HGTV, Food Network and Discovery Channel, the Warner Bros. film studio, and streaming services HBO Max and Discovery+. The company will be known as Warner Bros. Discovery. And Amazon recently unveiled an $8.45 billion deal to acquire MGM.
Asked on Monday how key sports rights deals are for ViacomCBS’ streaming services, Bakish said “sports are an important part of our strategy, for sure” and the company is “seeing real value creation here.” He pointed out various international soccer rights deals as beefing up the offering beyond NFL games. Overall, he said the firm now offers “over 1,600 matches annually.”
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