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Bob Bakish acknowledged Tuesday that Viacom “kind of took it on the chin for two years with respect to distribution revenue” by making the decision not to do the sort of big, bundled licensing deals with Netflix and the other streamers that its competitors were doing.
Bakish said Viacom, where he is CEO, “curtailed” licensing content to SVODs in 2017 because it didn’t want to damage the cable TV ecosystem, even in exchange for short-term profits. Therefore, Viacom has “warehoused a set to rights” that will go to Pluto TV, the ad-supported streaming service it agreed to buy in January for $340 million.
The CEO said Pluto will be getting access to Viacom’s library but that its latest and greatest content is still reserved for paying cable and satellite subscribers.
“It’s important to note that this is a global opportunity” even though Pluto for now is largely focused on the U.S. “They just launched in Germany and the U.K. at the end of calendar 2018, but with Viacom we have operating footprint that is truly globe-spanning,” he said.
Bakish called Pluto “a powerful new driver” of business as it seeks new deals with operators that carry its channels, like Nickelodeon, Comedy Central, MTV, VH1 and more, because some will also opt to distribute Pluto.
“And by the way, the last thing it is, is it’s the cornerstone of our direct-to-consumer strategy…it’s a free service that is the entry point into that ecosystem, but we will upsell targeted B2C products above that — Noggin, Comedy Central, a new Nickelodeon product,” he said.
Bakish, speaking at the Morgan Stanley Technology, Media & Telecom Conference in San Francisco, also raved about the hiring of Brian Robbins in October to head Nickelodeon where he noted a strong slate of new shows and also that the ratings declines at the children’s network are “significantly less bad than they were before.”
The turnaround at the Paramount film and TV studio has been going great, with seven quarters of improvement in operating income and is on track to turn a profit in fiscal 2019, Bakish said.
He said the BET-branded movie What Men Want will likely make $60 million domestically (it’s at $45 million now) and predicted, “we’re going to make nice money on that.”
Bumblebee is at $459 million worldwide and will be “solidly profitable” while the previous movie in the Transformers franchise lost $100 million for Paramount, Bakish said.
On the studio’s TV side, “it didn’t exist four years ago, crossed $400 million in 2018 and it should grow on the order of 50 percent in 2019. Importantly, it’s not just delivering shows, it’s producing hits,” he said, noting the popularity of Jack Ryan on Amazon.