This article is from the WeChat public account: EW-Entertainment , author: segment Scotland, Photo by Alex Suprun on Unsplash

In 2006, Sumner Redstone, the American media mogul in charge of Viacom and CBS, (Sumner Redstone) We hope that they can get better market performance with their different characteristics. CBS is stable, pragmatic and reliable. In contrast, Viacom is good at challenging risks and has more growth potential.

Over the decades, the media landscape has changed dramatically, and the two have not shown their strengths as expected. Sumner’s daughter Sally Redstone is working to reorganize the scattered content brands into one.

In August this year, CBS (CBS) and Viacom (Viacom) has finally announced its compounding and will complete the transaction in December. According to foreign media data, the new company is valued at approximately $ 31 billion; during the same period, Viacom’s third quarter financial report The performance exceeded Wall Street expectations, and achieved two bright results: Paramount Pictures resumed profitability for the first time in 4 years, Viacom’s comprehensive recovery for the first time in 6 years, US advertising revenue is growing, and Viacom CEO Bob Bakish (Bob Bakish) calls it “evidence of corporate transformation.”

The merger of the two major groups has almost coincided with the accelerated influx of new players in streaming media. Obviously, the traditional media transformation is indispensable.Rich Viacom and CBS. Earlier, we have analyzed the unique strategy of streaming media from the perspective of Viacom. Under the integration background, the group’s overall streaming media path planning has also been adjusted.

In fact, from the perspective of scale, market value, and financial condition, the new Viacom does not have an advantage in the streaming competition, so the streaming competition has to find another way.

In the previous analysis, we mentioned that Viacom played a combination of “SVOD + AVOD” in the streaming media business. The content for streaming media comes from the content library and the original, and from the other side. Third-party transactions and licensing; at the same time, the group is equipped with multiple digital content studios, which can continuously output works on original self-made and external joint systems.

Apart from the differences in the models, Viacom’s cards are not bad from the perspective of content alone. On the whole, TV, mainly includes music, entertainment, and children. (Nickelodeon) , Black Entertainment TV (BET) Four major assets, including MTV, BET, comedy Center and other stable TV channels that attract a large number of young users; the film side is mainly Paramount Pictures, which has been established for a century; more directly watch the company’s content IP, including “Transformers”, “Mission Impossible”, “Star Trek”, ” “Special Forces”, “Ghost Record”, “Spongebob”, “Super Heroes”, “Ninja Turtles”, “South Park” and other series and new works.

However, the transition from the good licensing business to the original DTC business is not just a problem faced by a traditional media transformation. Soon Viacom CEO Bakish will become the new company “Viacom CBS” < span class = "text-remarks" label = "Remarks"> (Viacom-CBS) , the eve of the transaction, he said: “Once the merger is completed, ViacomWill take a unique path in the streaming media market. “

Taking this opportunity, we will also focus on the new Viacom CBS and see how it can take a unique path to streaming media in terms of scale, technology and investment.


Combined Fundamentals-Balance Streaming SVOD + AVOD integration Traditional business integration into Internet elements

Combined Viacom CBS (Viacom-CBS) The content library is integrated with creative resources, and has accumulated more than 4.3 billion users in 180 countries worldwide.

Facing the new entity that is about to take over, CEO Buckish believes that the company’s first task is to expand direct-to-consumer streaming video channels. He also puts forward two requirements for the company’s operations-“differentiation” and “Capital efficiency”, under this guideline, the new company did not simply mix the streaming media business into one, but chose a deep integration of SVOD + AVOD.

Viacom has already stated that the goal of the streaming business is not to create a Netflix competitor. In addition to the SVOD subscription model, it is also optimistic about the opportunity of free and ad-supported models.

CBS and Viacom also form a combination of SVOD and AVOD.

CBS is mainly based on the subscription model (SVOD) , and there are two services under it: CBS All Access”label =” Remarks “> ($ 9.99 per month, $ 5.99 per month with advertising) and Showtime Online (David Nevins) hints that the company may launch multiple additional streams for specific audiences Media subscription services and emphasized that CBS and Viacom have successfully acquired key populations, such as ethnic minorities and gender groups, that have been ignored by several other platforms. “Participating in games that are slightly different from other players will present many opportunities … we will become more customized” CBS also promised to add more of its own content to Pluto TV in the future.

Of course, the combination of SVOD + AVOD is not only an opportunity, but also a model gap that the two companies need to fill in the integration process. Faced with the task of forming a rich content and wide user streaming solution,It only needs to be done well and quickly. Traditional cable TV is rapidly declining. Pay TV companies have lost 5 million users in the past five years, of which 1.3 million users have been lost in the second quarter of 2019 alone. Advertisers are also eager. More alternative delivery objects.

But as expected, Viacom CBS will not easily abandon the traditional TV network business. Bakish believes that even if most young consumers are more inclined to fragmented content consumption, there will always be a wave of viewers who like ” Bundle Package. ” The company will also partially release a content library containing hundreds of film and television programs. “The vast majority of American households still have TVs, so we will of course provide TV shows.” And the SVOD + AVOD route was taken by Buckish Summarized as corresponding to “a better and more predictable growth path and better risk management capabilities”, it is also the difference between Viacom CBS.

In fact, Viacom ’s cable TV business is also following the trend of “cutting wire” and connecting with the Internet in terms of content. For example, it invites YouTube influencers to participate in original episodes and broadcast them on the official YouTube channel; In addition, part of the company’s cable TV marketing promotion will incorporate online elements, such as reading “Twitter bad reviews” on the show, or posting the program content to a series of social platforms.

A year ago, the company launched Vias Digital Studio (VDS, Viacom Digital Studios) , responsible for the company ’s overall Digital strategy, VDS broadcasted cable content on online platforms and received good market feedback. The company claims that social video viewing and viewing market have increased by 83% and 119% respectively over the past year. The average number of views is 4 billion, and the cumulative viewing time exceeds 6 billion minutes.

Despite improvements in some of the company’s major earnings reports, net profit for the fourth quarter declined. This shows that while the recombination of Viacom and CBS may be good for the company as a whole, someThe business still faces challenges.

Adjustment of the combined streaming media content strategy After the combination of external authorization and original IP

In elaborating on the streaming media strategy, Bakish stated that Faced with the general trend of consumer groups to migrate to online streaming media, their digital business mainly depends on the development of their own streaming media platforms and third-party streaming media platforms Achieving two aspects of content integration is different from fighting for content control and exclusive broadcast rights on the platform with the SVOD model as the core. Viacom CBS under the integration of SVOD and AVOD will “select external authorization and third parties Platform integration “is one of the feasible strategies, and is reducing the company’s overall financial risk through a series of IP authorization and cooperation transactions.

Recent transactions include: Paramount Pictures reached a licensing agreement with Netflix to produce a sequel to its movie IP, Beverly Hills Super Police; Nick Kids Networks (Nikelodeon) reached a film and television content license agreement with Netflix; the stars of the Comedy Center participated in the production of Quibi, a mobile short video streaming platform.

Beverly Hills Super Police Series

Sale Redstone, the company ’s vice president, asserts: “20% to 25% of Netflix ’s content can be outsourced to ViacomCBS,” and believes that the broader the company can bring the content, the more it can develop The size and the sum of its parts.

“Take Nick International Children ’s Channel as an example, 40% of the audience between the ages of 2 and 11 now know the brand, but 60% of the audience is not covered. If differentiated content is created, it will be on Netflix. Waiting for platforms to broadcast will help attract users back to our digital and video platforms. “This strategy alsoRecognized by Redstone as the best way to maximize the value of your content and grow your brand around the world.

For which content IP flows internally and which is delivered through third-party platforms, Buckish also revealed some tendencies, he pointed out that the company uses a “three-part framework” to complete Viacom’s decision-making and Viacom- The development of CBS:

First, it is necessary to see the direct economic consequences of a decision, considering the economic value of authorizing an IP to a third party for a period of time under the current market environment, and how this value affects the company’s entire financial plan. Implementation.

Second, the company also has strategic considerations. The main consideration is the potential for IP to release other values, which may include putting IP on other platforms to help the platform ’s growth and value creation. Including the use of this IP to drive the value of other businesses, for example, the use of IP’s rising popularity to stimulate derivatives, entertainment, or potential downstream film adaptation businesses.

Finally, consider the continued cooperation. Specifically, an IP can deeply influence the broader relationships with partners, which are usually at the issue level, but in some cases, it may also be at other levels, including creative space.

The two bright spots worthy of attention after the merger

A sample AVOD: Pluto TV

In the streaming warfare where SVOD service is leading, the AVOD model is often ignored, but it also highlights huge potential and opportunities. Typical products are Pluto TV, which we have analyzed before.

AVOD-based Pluto TV has three main features:

1. Focusing on digital linear services, there are more than a hundred channels, covering licensed videos from Warner Bros., Lions Gate, etc., as well as the younger generation of financial news brand Cheddar and the satirical news brand The Onion And other relatively independent brand content.

2. On-demand content is supplementary: The on-demand content library has more than 5000 hours of content, covering multiple types of news, sports, and entertainment.

3. Large-screen terminal penetration is better: Before the acquisition, Pluto TV, with digital linear channels as its highlights, has occupied a certain share in home content consumption through extensive cooperation with multiple smart TV manufacturers.

Viacom has started several months after its acquisition of Pluto TV, its “Flagship Content Brand” Comedy Center, MTV Music TV Network, Black Entertainment Channel BET, Nick Kids TV Channel, Nick Jr. , Spike channel (Paramount TV Network) and other major TV channels migrated to Pluto TV, and also added vertical categories and prominent themes to Pluto TV Subdivision channels, such as “Comed Center Talk Show”, “MTV Dating”, “MTV Teen” channel, “Paramount Movie” channel and “Spike Outdoor” channel, hoping to attract the attention of advertisers … Yacomm set up several temporary channels to release multiple episodes of TV content at one time, which is convenient for viewers to “burn the drama.”

According to foreign media reports, Pluto TV ’s monthly active users in the United States have increased by 70% to 20 million since the acquisition, and 43 new channels have been launched, of which 24 are from Via Comm ’s brand; Viacom ’s advertising-based Pluto TV boosts Viacom ’s first full-year ad revenue growth in six years. In the fourth quarter of last year, PlutoTV had a total of 3500 brand advertisers. First profit,

In the financial report, CEO Buckish and outgoing CFO Wade Davis mentioned the strategy and financial growth prospects of Pluto TV, which will mainly focus on its ad mode, Buckish said , Pluto TV has created a huge digital advertising library for the company, with domestic advertising sales alone exceeding US $ 1 billion; he believes that Viacom ’s 6% ad revenue growth this quarter, Pluto TV contributed, fundamentally Increased the number of advertisers for the company, helping the company ’sGrade Marketing Solutions (AWS) Segment sales increased by 76% to $ 604 million.

Research from Digital TV Research shows that global AVOD distribution revenue will nearly triple from US $ 21.9 billion in 2018 to 2024 and is expected to reach approximately US $ 56 billion; worldwide AVOD revenue in 2019 will exceed US $ 26.7 billion, of which The Asia-Pacific region has the highest concentration of US $ 13.2 billion, and North American AVOD revenue will grow from US $ 6.1 billion in 2018 to nearly US $ 7.7 billion this year. By 2024, the North American AVOD platform will generate $ 20.3 billion in revenue.

It can be seen that while other platforms are doing their best to attract subscribers, AVOD uses user viewing data to attract a large number of advertisers. In addition, in overseas regions where pay TV still occupies a strong position, the AVOD model is also more Have the opportunity to open the market situation. In the trend of subscriber growth becoming saturated and streaming media subscription costs all the way, developing AVOD is a good differentiation strategy. The development of a comprehensive model is also reflected in a single service. Viacom said that it plans to add paid subscriptions to Pluto TV. mode.

Second Digital Strategy: VDS

Viacom Digital Studio (VDS) is the cornerstone of the company’s overall digital strategy. In a small part, VDS has not been profitable due to the continuous construction of digital business, but Viacom’s digital business has made significant progress.

Although it lags behind Warner Media, Disney, and Comcast / NBC Global, in order to enhance the growth potential, VDS has formed a diversified investment portfolio internally and constructed a diversified income source. These include the acquisition of digital content studio Awesomeness from Verizon, NBC Universal, and Hearst last year, as well as the acquisition of offline content businesses that are highly related to brand content such as VidCon and SnowGlobe Music Festival, and MCN institutions such as WhoSay.

Among them, Vidcon, which was acquired by Viacom in 2018, has the most prominent influence. In 2019, the total number of attendees at Vidcon events will increase to 400.It has expanded from the US to Australia, London, Mexico, Singapore and the Middle East.

VDS President Kelly Day (Kelly Day) believes that the key to the company’s digital business is to have multiple sources of income, including online Advertising, branded content, live events, content licensing and derivative products are all barriers for companies wanting to monetize digital content. “There is no magic bullet for building a profitable digital media business.”

The acquisition of the new studio not only enhances the hematopoietic capacity of original content, has a rich age range for audiences, but also adds many platform partners for the parent company. In addition to YouTube, Snapchat, and Facebook upstream content, Awesomeness Revealed, Hulu’s content production partner.

For Viacom, VDS is also exploring the “how the cable TV network responds to digitalization”. In order to realize the value regeneration of cable TV content on social networks and digital platforms, VDS has gradually formed a methodology. The contents of MTV, Comedy Center, and Nick Children ’s Channel are increasingly exposed on the online platform. VDS also tried to replicate this model internationally. In August 2018, Viacom International Digital Studio was launched, with 52 International offices collaborate to produce content in 17 different languages.

After the merger: market forecast & potential synergy

After the merger, the company ’s leadership has been adjusted accordingly. Viacom ’s CEO Bob Bakish will become the president and CEO of the group as a whole; CBS acting CEO Joseph Ianillo (Joseph Ianniello) will serve as chairman and CEO of the company’s CBS; Viacom’s former CFO Wade Davis (Wadw Davis) is about to leave; Paramount Pictures CEO and Chairman Jim Ginabliss (Jim Gianopulos) and production president Elizabeth La Pozo (Elizabeth Raposo) will continue to serve.

There are opinions in the market that compared with other streaming media companies, even if CBS merges with Viacom, its size may be quite small. The company needs to speed up the purchase of content or continue to expand the scale in order to compete in the streaming media. Won the ranking.

The market has emerged with opposing views on whether it is able to fund acquisitions after the merger.

Analysts predict that Lionsgate and its Starz channel that CBS was trying to acquire may become a priority object; there are also opinions that AMC Television Network, MGM, and even Murdoch ’s Fox Group are “thin behind” Are likely to be potential acquisition targets, given Viacom’s experience in acquiring international television business (such as the acquisition of Channel5 in the UK and Telefe in Argentina) , and The new company will seek overseas growth opportunities, and perhaps the target of purchases and acquisitions will also be overseas assets.

In terms of synergy, Viacom CFO Bakish said on the conference call that the revenue synergy mainly focuses on the following four aspects:

1. Coordination of distribution and distribution. After the integration, the new company’s content in the prime time of cable TV will reach 22%, but the fee charged currently only reaches 11%, so it has improved.space.

2. The synergy of advertising revenue in the United States, the combination of the two will further maintain the leading position in advertising in the linear market. / span> will also work.

3. Content licensing collaboration will combine the company ’s many studios to produce TV content for the Hollywood company, and establish a single point of contact around bundled services, enabling it to account for more of the global buyer ’s budget.

4. Streaming media collaboration. Although CBS and Viacom are slightly different, the combination of complementary content and platforms can enhance the comprehensive strength of the product and create a free and paid streaming media ecosystem, but it is worth noting that Because the brand is relatively unique, the brand synergy is not outstanding.

Bob Buckish

In terms of membership fees, advertising revenue, DTC business, etc., the company will have billions of dollars in revenue growth. The two companies also hope that the synergy will save the company 500 million dollars in capital and bring additional Strategic benefits. Although there are no details, some insiders of the company said that cost coordination mainly corresponds to the coordination of back-office services. Perhaps it may reduce costs by integrating legal, fiscal, government relations, human resources, communications and technology services; the company also emphasized Cost savings on content investment and marketing.

Some analysts believe that in terms of content promotion, CBS can also launch temporary channels on Pluto TV to help activate the idle content library. On the positive side, there are views that CBS Viacom’s profitability will be It is roughly equivalent to NBCUniversal. The content expenditure of the former in 2019 is expected to be 13-15 billion US dollars, which is almost the same as Warner Media.

This article is from WeChat public account: stuff entertainment (EW-Entertainment) , author: segment SU 格