The newly combined ViacomCBS Inc is to invest in more movies and TV shows, and try to sell more advertising as it seeks to become a bigger player in the growing business of streaming video.
Yet the bigger company still might not be big enough to be competitive, as larger rival Walt Disney Co launches its own service in November and streaming pioneer Netflix Inc spends even more on original shows and movies.
That is not stopping Viacom Inc chief executive officer Bob Bakish, who is to lead the combined company, to declare that ViacomCBS would be “one of only a few companies with the breadth and depth of content and reach to shape the future of our industry.”
CBS Corp and Viacom, which separated in 2006, announced their long-anticipated reunion on Tuesday.
Viacom owns the Paramount Pictures movie studio and pay TV channels such as Comedy Central, MTV and BET, while CBS has a broadcast network, television stations, Showtime and a stake in The CW over-the-air network.
CBS was one of the first media companies to launch its own streaming service, CBS All Access. The US$6-a-month service now has a new Star Trek series, a revival of The Twilight Zone and archives of old and current broadcast shows.
Acting CBS chief executive officer Joe Ianniello, who is to head the CBS business in the combined company, said in a telephone call with analysts that the company might add content from Nickelodeon, BET, MTV and Comedy Central to CBS All Access and Paramount movies to Showtime.
CBS’ ad-supported CBSSports HQ and ET Live could be added to Pluto TV.
The company hopes to beef up its international offerings.
“The combined company will have the best of both worlds, premium US programming that seamlessly travels across borders and hundreds of thousands of hours of locally produced international programming, all available with the click of a button,” he said.
Once the deal is completed, expected by the end of the year, ViacomCBS would have a combined library with more than 140,000 TV episodes and 3,600 film titles, including franchises such as Star Trek and Mission: Impossible.
The two companies have been major content spenders, having spent more than US$13 billion combined in the past year, or close to the estimated US$15 billion Netflix is expected to spend on content this year. The two companies have more than 750 series ordered or in production.
However, the combined company would still be small. CBS has a market value of US$18 billion and Viacom about US$11.7 billion. Disney’s is nearly US$245 billion and Netflix is at US$136 billion.
CBS has said All Access and its Showtime streaming services have 8 million subscribers combined.
That is far less than the 60 million US subscribers that Netflix has, though it is comparable to the estimated number of subscribers to HBO Now, that network’s stand-alone streaming service.
The Paramount movie studio, despite hits like last year’s A Quiet Place and the latest Mission: Impossible sequel, has just 5 percent of this year’s market share at the box office. It has not been in the top five since 2011.
The companies said the combined company would have US$28 billion in revenue.
By combining, the companies say they would save US$500 million a year.