Questioning ViacomCBS’s Streaming Strategy
ViacomCBS is one of a few media mega conglomerates. Comcast, Disney, and AT&T are also in that list, and those three have a robust streaming strategy. Comcast has Xumo as their free live TV platform, and Peacock as their streaming service. Disney has, of course, Disney+ for family-oriented content, as well as Hulu as their HBO-style platform, and ESPN+ for sports fans, and they can be combined. AT&T has HBO Max, merging the wide range of their properties under one roof. ViacomCBS on the other hand has a long list, which includes CBS All Access and Pluto TV and Showtime and BET+ and Noggin. Compared to the others, there is an obvious problem.
AT&T owns Warner Bros., HBO, and Turner which all own a great deal of content. The same goes for Comcast owning NBCUniversal, and Disney owning seemingly everything else. They all have a great deal of valuable properties which they are using to beef up their streaming services. Netflix used to be filled with content from 3rd parties, notably the shows Friends and The Office, but now those two shows will eventually leave for their corporate homes at Peacock and HBO Max, respectively. The same goes for Disney finishing out their contracts with Netflix to move their remaining Marvel and Disney content to Disney+. The whole idea is if you know who owns what, eventually they’ll all be with their corporate streaming service.
When Viacom and CBS merged, some things have come together. CBS airs movies from the Paramount vault on weekends, Pluto TV features more content from CBS properties like CBS Sports HQ, CBS’s Pop channel simulcasts its shows to other Viacom channels, and, for a short period of time, The Late Late Show aired the previous night’s show the next day on Comedy Central. The same can’t be said for CBS All Access, their dominant streaming platform with around 5 million subscribers, a number far lower than Disney+. They had announced that more Viacom content from their channels and Paramount would be added to the platform, with little communication beyond that. Some Paramount movies have been added, but not much else has been discussed. No one knows if CBS All Access will retain its name, or if another service will be revealed, but that’s not their only issue.
Even if ViacomCBS put all their eggs in CBS All Access, raised the price to make it compete with a service like HBO Max by adding in Showtime and the rest of their brands and services, it would be missing crucial content. South Park landed a multiyear $500 million deal exclusively with HBO Max that gains its entire library as well as new episodes 24 hours after they air on Comedy Central. Another big draw, SpongeBob streams on Amazon Prime. Comedy Central’s Reno 911! reboot airs on Quibi, as well as other deals for Viacom’s library across various other streaming platforms. The point is, at least for right now, much of Viacom’s valuable library is streaming elsewhere. Of course these deals aren’t in perpetuity, their contracts eventually will end and they will need a home elsewhere, but considering South Park was on Hulu for six years, initially a three-year deal, one could assume the same three year duration for the HBO Max deal, meaning if CBS All Access ramps up content within this year, a major asset to Viacom will be missing for years.
Not to mention Viacom formed Comedy Central Productions with the sole purpose of developing content to distribute to third-parties, like Quibi. This is in line with Viacom making deals with third-party platforms, as Nickelodeon announced a SpongeBob spinoff for Netflix in addition to a Paramount movie skipping a theatrical release and heading straight to Netflix. Another former Comedy Central show Lights Out with David Spade was cancelled amid COVID-19 and low ratings, with reports indicating Comedy Central looking for a third-party home. With the possible sale of Lights Out, and The Daily Show being extended to 45 minutes, this could be a signal from Viacom that 11:30pm on Comedy Central is no longer attainable. Either way, the question becomes what does Viacom keep for themselves and what do they sell? If you sell your valuable existing assets, in addition to new ones that could be promising for your brand, what are you left with?
Although Viacom can point to linear ratings increases, especially in the coveted 18-49 demo, what does this mean for their cable channels? ViacomCBS has announced several layoffs in various divisions, one in particular was TV Land, Paramount Network, and most importantly Comedy Central consolidating into the rest of the Entertainment division at Viacom. In doing so, Comedy Central experienced deep layoffs in their development division, and is now under the control of one president overseeing many brands. Comedy Central was once a dominant brand in comedy, and as the New York Times article discussed, with much of the buzz focusing on Netflix’s great push for comedy, that may not be the case anymore. Especially when Viacom spends some $200 million to air Seinfeld across its channels. Seinfeld’s a great show and is sure to pull in ratings, but does this signal an even greater loss for development for the channels?
At this point in time, ViacomCBS does not have a solid streaming strategy publicly in place, so if they can make multimillion dollar deals with third-party platforms in the meantime, it’s a solid short-term business move. ViacomCBS doesn’t have the same leverage as other conglomerates, as evidenced with the various carriage disagreements Viacom has had over the years. The CBS network along with the news and sports that come with them are incredibly beneficial to Viacom. YouTube TV announced Viacom channels would be added to their service, and it is very likely when Hulu + Live’s CBS deal needs to be renewed, you can almost bet Viacom channels will show up, on two platforms that have been Viacom free since their inception.
In the past, Viacom had to be very careful about engaging in streaming, with the CEO in 2017 publicly stating their intentions on keeping their shows on cable, to provide a better value for cable, which ensures their carriage on cable systems, which provides Viacom with lucrative carriage fees, especially when ad sales are down. Now as a merged company, and with time proving streaming inevitable, ViacomCBS has much more leverage together. While they can engage in streaming with less consequences than in the past, they still have to make sure they don’t anger cable providers too much. Still, it explains their possible reasoning as to why CBS All Access is still missing key Viacom properties. If Viacom added its channels’ shows to the service, it could cause cable carriers to drop their channels. Viacom’s channels are available in over 80 million cable households, compared to the 5 million on CBS All Access, meaning a great loss, and an uphill battle to regain subscribers.
In short, we’re in a very strange time for old and new media. Companies are still trying to figure out how to deliver content in ways that consumers will be happy, and the companies can still make outrageous amounts of cash. ViacomCBS still rakes in insane amounts of cash regardless of their streaming situation. While they may not have, at this moment, a streaming platform to rival HBO Max and Peacock, they’ve certainly added a tremendous deal of content to Pluto TV, both from ViacomCBS’s library as well as licensing other content. ViacomCBS also owns part of Philo, a OTT online cable service geared for those who don’t need sports and news. They also have several deals with social networking websites to provide exclusive content, like The Daily Show’s Emmy-winning Behind the Scenes and several podcasts for ViacomCBS’s various shows. ViacomCBS certainly isn’t out of the streaming industry, but if they want to keep their brand relevant, CBS All Access at the very least needs some help.