Viacom Buys Streaming Service Pluto TV in $340 Million Deal
Viacom has entered into a definitive agreement to acquire Pluto TV, a leading free streaming television service in the U.S., for $340 million in cash.
Founded in 2013, Pluto TV streams more than 100 channels and thousands of hours of on-demand content spanning television and movies, sports, news, lifestyle, comedy, cartoons, gaming, and trending digital series. The ad-supported, internet-based TV service features programming sourced from more than 130 partnerships with media networks, major film and television studios, and a wide range of digital content producers.
Pluto TV has more than 12 million monthly active users, 7.5 million of which are on connected TVs. Its audience streams billions of minutes of content each month across devices such as Roku, Amazon Fire TV, Android TV, Apple TV, Chromecast, and Sony PlayStation consoles as well as built-in integrations on smart TVs from Samsung and Vizio, and mobile apps on Android and iOS. Pluto TV has also secured new distribution deals that will make the service available on tens of millions of additional devices in the coming months.
The acquisition of Pluto TV advances Viacom’s key strategic priorities, including expanding its presence across next-generation distribution platforms and growing its advanced advertising business. Additionally, access to Viacom’s global reach, brands and unencumbered library will help solidify Pluto TV as a leader in the free streaming video market in the U.S., and accelerate Pluto TV’s global growth.
For Viacom, the acquisition serves as an important marketing engine to acquire and retain consumers for Viacom’s targeted subscription products, including Noggin and Comedy Central Now, while also providing a new distribution outlet for Viacom Digital Studios’ content (beyond the existing AwesomenessTV channel on Pluto TV) and promoting its brands and content that live on other platforms.
Enhancing its marketing solutions, the acquisition will immediately add billions of high-quality addressable advertising impressions and bring an additional audience that is young, gender-balanced and often hard to reach.
For its distribution partners, the deal adds a premium, free service for broadband-only and other subscribers, serves as a customer acquisition and retention tool for certain tiers of pay-TV packages, and represents an opportunity for all types of distributors, including mobile operators.
“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,” says Bob Bakish, Viacom president and CEO. “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.”
“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,” says Pluto TV CEO and Co-Founder Tom Ryan. “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.”
Ryan will continue to serve as CEO of Pluto TV, which will operate as an independent subsidiary of Viacom upon closing of the transaction. The transaction is expected to close in the first quarter of 2019 and is subject to customary closing conditions and regulatory approval.
Paul Hastings, Covington & Burling and Shearman & Sterling served as legal counsel to Viacom. Gunderson Dettmer and Hogan Lovells served as legal counsel to Pluto TV, and LionTree Advisors served as financial advisor to Pluto TV.
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