ViacomCBS' Free Streamer Pluto TV Is Profitable Ahead of Schedule

ViacomCBS’s free, ad-supported streamer Pluto TV is focused on growth, not on turning a profit. But as the platform became a $1 billion business in 2021, the U.S. side of the business is also going to be profitable earlier than anticipated, ViacomCBS CEO Bob Bakish shared Tuesday. “Pluto in the domestic U.S. today is profitable,” Bakish said at the UBS Global TMT Conference. “It’s actually profitable in ’21 and it’s at margins approaching broadcast. This business clearly has the opportunity to create incremental bottom-line value.” The news is a sign of the streamer’s faster-than-expected growth and the favorable conditions surrounding ad-supported streaming, and Pluto TV in particular, recently named Adweek’s hottest AVOD streaming service. But it also stands in contrast to the company’s subscription-based business anchored by Paramount+, which debuted in March as a rebranded and expanded version of CBS All Access. That subscription side of the business, Bakish said, will take a little longer to get to profitability, especially as it continues to invest heavily in new content spend. The company expects to spend $5 billion on content by 2024, it has previously disclosed to investors. Kids Shows, Movies and Sports Boost ViacomCBS Streaming Subscribers to 47 Million “It’ll take a couple years— as it has for everyone—to get to profitability,” Bakish said. “We look at our plans and we’ll get there as well. We strongly feel like we’re on the right track and that this is an incremental business.” By the end of the year, ViacomCBS’ streaming businesses are expected to clear $5 billion in revenue, Bakish said, and the company has picked up about $1.2 billion in incremental streaming revenue year-to-date. “What I can see looking at all this is that our plan is working, and arguably better than we thought when we crafted it,” he said. A continued international push The numbers help illustrate how ViacomCBS is thinking about continuing to expand its streaming arm in 2022 as the competition for audience eyeballs grows ever fiercer both in the U.S. and beyond. Streamers are looking for ways to reduce churn and keep customers around for longer while also finding ways to expand into international markets. “If ’21 was at the core about the launch of Paramount+, ’22 is really about international expansion,” Bakish said. The company already has irons in the fire: ViacomCBS previously announced that it had partnered with Comcast-owned British broadcaster Sky on the international streaming service SkyShowtime, a 50-50 joint venture between the two companies that will help expand ViacomCBS’s eastern European presence years ahead of schedule. New today is the news that Paramount+ will debut next year in South Korea, the streamer’s first market in Asia, as part of a partnership with the broadcaster CJ ENM that was announced Tuesday that will include a streaming bundle with the CJ ENM-owned streamer TVING. As part of that partnership, the companies will co-develop and co-produce English-language scripted series, films and new Korean series for global distribution on Paramount+, while Pluto TV will receive K-content aimed at U.S. audiences. That means that ViacomCBS will increasingly claw back its programming to leverage it around the world. Case in point: “We just took back Star Trek: Discovery internationally from Netflix, and so we now have that property globally,” Bakish said. “That’s clearly a core franchise for us and it’s working. We just launched Season Four and it’s off to the fastest start in terms of subscribers than all of the Discovery seasons to date.” Other titles doing the heavy-lifting include Showtime’s Dexter: New Blood, which set new records for OTT sign-ups on its first night on the service and became Showtime’s most-watched drama debut in Showtime history, and Yellowjackets, which has grown to become Showtime’s second-biggest OTT series yet. Meanwhile, the company is also tracking linear wins, like with Yellowstone, which became a rare linear smash hit following its November debut. Bakish was coy about possible acquisitions and mergers following a question about industry shifts following the WarnerMedia-Discovery megadeal earlier this year, but he threw cold water on any thoughts of another mega-deal. “There's certainly potential for additional consolidation in this industry, particularly with respect to the smaller players, and there's some narrative around that,” Basish said—but “big picture, we really like the configuration of the company” as it stands.” (With that said, ViacomCBS “might do some small, small tuck-in acquisitions here or there.”) As ViacomCBS expands its international efforts, it will begin reporting out its direct-to-consumer segment more directly, so investors can see a more precise breakdown, Bakish shared. And mark your calendars: the company plans to share more with the investment community in early 2022 in an investor day.