ViacomCBS ( VIAC Quick Quote VIAC - Free Report) recently signed an expanded distribution deal with Disney’s ( DIS Quick Quote DIS - Free Report) Hulu + Live TV, which is currently the fifth-largest pay-TV provider in the United States with 4.1 million subscribers. Financial terms of the agreement were not disclosed. The new multiyear deal will give Hulu + Live TV subscribers access to stream 14 cable networks including BET, Comedy Central, MTV, Nickelodeon, Paramount Network, VH1, CMT, Nick Jr., TV Land, BET Her, MTV2, NickToons, TeenNick and MTV Classic. Moreover, Hulu + Live TV will continue to carry CBS stations including CBS Sports Network, Pop TV, Smithsonian Channel and The CW, as well as Showtime. Program Strength, Ad Dollars to Aid the Top Line
With the Hulu agreement in place, two of the top live TV streaming services available in the United States will now carry the ViacomCBS channel lineup. Last year, ViacomCBS struck a similar deal with
Alphabet’s ( GOOGL Quick Quote GOOGL - Free Report) Google-owned YouTube TV, which currently has 3 million subscribers. Since the merger of Viacom and CBS in December 2019, the combined company has secured distribution deals with YouTube TV as well as Comcast ( CMCSA Quick Quote CMCSA - Free Report) , Dish and Verizon, plus affiliate deals with major station owners like Nexstar, Meredith, Cox and Sinclair. These deals expand ViacomCBS’ content offerings and boost user engagement levels, thereby attracting advertising dollars. Additionally, higher investments in original content and focus on providing quality entertainment are expected to expand the audience base for brands like MTV, BET and Comedy Central. Moreover, a solid portfolio of streaming services (both advertising and subscription-based offerings), including CBS All Access, Showtime OTT, Pluto TV, Noggin and BET+ is expected to remain a key growth driver in the near term. Growth Prospects Amid Streaming War
The streaming market, which is expected to reach $184.2 billion by 2027, per
Grand View Research, has attracted prominent tech and media companies like Apple, AT&T and Disney. This has intensified competition for the likes of Netflix, Amazon and Roku. Last year, Comcast’s NBCUniversal launched Peacock, which has a free ad-supported tier. Peacock has already reached a licensing deal with ViacomCBS to carry select CBS and Showtime series along with Paramount films. Meanwhile, AT&T’s WarnerMedia debuted its $15 a month HBO Max service.
The launch of Paramount+ in 2021 is the perfect opportunity for ViacomCBS to attract new users, leveraging upon the expanded content library. Paramount+ will feature programs from the ViacomCBS portfolio, spanning broadcast television, news, sports and entertainment brands.
CBS All Access will relaunch with a slate of original shows exclusive to Paramount+, including Lioness, a spy drama from Yellowstone creator Taylor Sheridan, a revival of BET’s comedy-drama The Game, a crime series based on true stories called The Real Criminal Minds and The Offer, a scripted series about the making of the mafia saga, The Godfather. Markedly, Showtime, the sister streaming service to CBS All Access, will continue to operate separately from Paramount+. Moreover, this Zacks Rank #4 (Sell) company also has a thriving free streaming service in Pluto TV, which has more than 26.5 million subscribers in the United States and several global territories. ViacomCBS is looking to use the free ad-supported service to attract advertisers and provide target-based ads, thereby expanding its advertising revenues. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here Stocks Set to Double
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