ViacomCBS Plans International Streaming Service and Expanded CBS All Access Originals

Company touts streaming gains as Q2 TV advertising drops 27% due to Covid-19

Photo of ViacomCBS CEO Bob Bakish
“Streaming is clearly a global opportunity,” ViacomCBS CEO and president Bob Bakish told investors. ViacomCBS

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A week after CBS All Access received a bulked-up library and a UI facelift, parent company ViacomCBS says new originals from all of the brands on the service, including BET, Comedy Central, Nickelodeon and Smithsonian, will arrive to the streamer beginning in 2021.

The plan, which executives detailed to investors during quarterly earnings this morning—where the company also said that advertising revenue had fallen 27% in the quarter due to Covid-19—will accompany a long-planned rebrand of CBS All Access into what ViacomCBS president and CEO Bob Bakish called a broader “super-service” that can go head-to-head against paid and free streamers like HBO Max, Hulu, Netflix and Peacock. The company has an originals plan spanning quarterly through 2022 to help support anticipated growth, executives said.

“Today, All Access has a baseline of compelling originals,” Bakish told investors. “Starting in ’21, that slate will greatly expand to include all flagship brands.”

The originals will feature in a planned marketing effort around the rebranded service, which will debut early next year. The goal, Bakish said, is to develop originals that will be “defining” for the rebranded service and it help carve out a place among must-have services in American households.

But ViacomCBS’s streaming ambitions aren’t only a domestic pursuit: The company is planning the debut a massive all-purpose streaming service that will launch internationally in early 2021, Bakish said. The service will be more entertainment-centric than All Access and will feature first-run show premieres and Paramount titles. Unlike CBS All Access, it will also house premium cable channel Showtime’s programming, as Showtime does not operate internationally.

The new service will first roll out in markets like Brazil, Spain, France and Italy—all markets where ViacomCBS has existing local footprints—along with Australia, Argentina, Mexico and several Nordic countries, Bakish said.

Many of the other details about that streaming service remain under wraps, but the expansion plan underscores how ViacomCBS, and the other media giants, see streaming as the future of their businesses, and are eager to find footholds in domestic and international markets. ViacomCBS-owned free streamer Pluto TV is already charting additional global expansion plans, which will remain a separate endeavor from the paid streamer ViacomCBS is readying.

“Streaming is clearly a global opportunity,” Bakish said. “We believe that is true both in free and in pay.”

The news about the streaming push both in the U.S. and abroad comes amid a moment of growth for ViacomCBS’s streaming services. Domestic streaming and digital video revenues were up 25% to $489 million, the company reported in the second quarter, while domestic streaming subscription revenues were up 52%.

Pluto TV, the company’s free channel-centric streaming service that Viacom acquired less than two years ago, reached 26.5 million monthly active users domestically in the second quarter, up 61% year-over-year. Total global monthly active users reached 33 million. On the subscription side, paid streamers—which include CBS All Access and Showtime OTT, along with smaller streamers like BET+ and Noggin—counted 16.2 million subscribers, 74% higher than a year ago. The company now projects it will surpass 18 million combined subscribers by the end of 2020.

While the company doesn’t break out individual subscription figures, Showtime OTT saw its best quarter ever in terms of subscriber growth.

“Our streaming strategy is working, and it’s really just getting going,” Bakish said.

The push into streaming is one that other major media companies, including Disney, are pursuing, as other parts of the traditional media business falter under the continued pressure of the Covid-19 pandemic. At ViacomCBS, advertising revenues for its TV entertainment segment were down 27%, which executives said was due to the overwhelming advertising pullback from Covid-19.

As for its cable networks segment, advertising revenue decreased 26% due to Covid-19, which offset streaming growth, but content licensing revenue increased 175% mainly because of the licensing of its adult animated title South Park to WarnerMedia streamer HBO Max.

ViacomCBS, unlike some of its media rivals, does not operate theme parks, as Comcast and Disney do, and was not as exposed in the sports media drop-off earlier in the year like AT&T was. That, combined with ongoing cost savings efforts coming from the relatively recent merger, means total revenues for the company were down 12%.

Chief financial officer Chris Spade, who is stepping back to become an advisor to the company come Aug. 10, said the company expected its second quarter losses to be the low point of the year and added that advertising revenue was already seeing a comeback. Scatter pricing has “held strong” at 20% above upfront pricing, Bakish said, while Pluto TV “quickly returned to pre-pandemic growth rates and pricing.”

On the theatrical side, ViacomCBS has opted to hold most of its theatrical releases in the quarter, meaning total revenues in the segment decreased 26%. While theatrical revenue was immaterial, the company was able to capitalize on transactional video-on-demand sales, and home entertainment revenues were up 30%.

The company is finding other ways to leverage its streaming properties with its theatrical titles that have no place to air. Paramount Pictures’ The SpongeBob Movie: Sponge on the Run will arrive on the rebranded CBS All Access service in early 2021 after a limited transactional video-on-demand window, the company previously announced.

@kelseymsutton Kelsey Sutton is the streaming editor at Adweek, where she covers the business of streaming television.