LONDON—New research from Omdia has revealed that Free Ad-Supported Television (FAST)'s growth in the U.S. is being powered by a small number of players with the top five channels accounting for more than 20% of monthly consumption and the top twenty controlling nearly half of viewing. 

"Although FAST has become one of the most discussed growth opportunities over the past three years in the U.S. with over 1600 channels now available in US, Omdia research in partnership with PlumResearch has found that growth is thanks to the huge reach of a handful of channels," explained Omdia senior director in media and entertainment Maria Rua Aguete said during a presentation at the annual Media & Leaders Entertainment Summit on November 7 in London. 

Omdia data suggests Paramount Global, and its Pluto TV division have staked a considerable claim on audiences with the top five US channels all owned by the studio.

Pluto TV Spotlight, Star Trek, Pluto TV Action, Pluto TV Reaction and Pluto TV Comedy accounted for 21% of consumption across the top 100 FAST channels in the U.S. in August 2023, while the top 20 channels accounted for around half of all FAST visits in that month.

Pluto TV and Paramount-owned FAST channels also took the top five spots in the FAST consumption charts in June and July. These channels are offering strong IP and elements of exclusivity which are becoming important to key channel operators.

"Content discoverability has become a vital tool for channel owners as the FAST ecosystem has mushroomed," said Rua Aguete. "Twenty channels now represent around 50% of FAST viewing in the US, so we are likely to see a lot more consolidation in future as the importance of offering strong IP – such as Star Trek – on an exclusive basis grows."

The consolidation of viewing comes at a time when the number of FAST channels is still rising. Between Q1 and 2023, major FAST services Samsung TV Plus, Pluto TV, Freevee and others increased the size of their channel catalogs, though ViX and LG Channels saw slight reductions, the researchers said. 

NEW YORK—With streaming companies seeing their stocks rally on Wall Street, Paramount Global seemed to confirm investor confidence in the future of the streaming industry by reporting healthy subscriber growth and reduced losses in its streaming operations. 

In its Q3 2023 earnings report, Paramount reported that its Paramount+ streaming service added 2.7 million net subs for more than 63 million globally. 

Management also said that Paramount continues to progress on the path to streaming scale and profitability and that its direct-to-consumer (DTC) segment remains on track to drive significant earnings improvement in 2024.

“Q3 was yet another significant step in our building of a scaled, profitable streaming business,” president and CEO Bob Bakish said in a call with analysts. 

The DTC segment saw revenue increase 38% year-over-year as subscription revenue grew 46% to $1.3 billion, driven by subscriber growth and pricing increases for Paramount+, and revenue from pay-per-view events.

In addition, ad revenue in the DTC segment rose 18%, reflecting growth from Paramount+ and Pluto TV as global viewing hours across Paramount+ and Pluto TV grew 46%.

Overall, Paramount+ revenue grew 61%, driven by subscriber growth and increased advertising revenue as Paramount+ global ARPU expanded 16% year-over-year.

Streaming losses also narrowed. Adjusted OIBDA improved 31% as higher revenue more than offset incremental costs to support the growth of Paramount+.

The company is now forecasting that full-year DTC losses in 2023 will be lower than in 2022, with DTC losses in Q4’23 similar to Q4’22.

During the Q3 earnings call with analysts Paramount Global president and CEO Bob Bakish noted that “there's no question the media industry remains dynamic and in many ways, complex, but our performance this quarter demonstrates clear progress against strategic goals, as we set the company up to return to significant earnings growth in 2024. In the third quarter, we grew streaming revenue in Paramount Plus subscribers while narrowing D2C losses.” 

“Q3 was yet another significant step in our building of a scaled, profitable streaming business,” he noted later in the call. “Paramount Plus crossed 63 million subscribers, and we delivered 38% D2C revenue growth aided by a successful price increase. We also narrowed our D2C adjusted OIBDA losses by over 30%. In fact, we now believe 2022 was our year of peak streaming investment meaning D2C losses in 2023 will be lower than in 2022. We're clearly advancing on the path to streaming profitability and this continued D2C improvement will be a key driver of the total company earnings growth we expect next year. Related to that, our integration of Paramount+ and Showtime continues to deliver as we expected. Since it launched at the end of June, the combination has driven increases in acquisition and engagement, ARPU and operational efficiency. The power of partnerships is also a meaningful contributor to our momentum.”

Bakish also argued that the strengthening of their streaming operations would help them as their traditional pay TV business continues to decline. 

“Recent negotiations in the industry have raised questions about whether the hard bundling of streaming and pay TV will become the norm in the U.S. and what that could mean for companies like ours,” he said. “The reality is, operators have different priorities, but we've shown that we can adapt our partnerships to accomplish common objectives. As we go forward, it is possible that some of our partners will embrace the strategy that more tightly integrates DTC into the Pay TV bundle. And we expect that if they do, the bundles would have many of the same advantages we've observed in the various hard bundles we've deployed internationally, namely a dramatically lower cost of acquisition and improvement in streaming churn, and it may improve TV ecosystem trends as well.”

“In addition, adding the scale of U.S. pay TV to Paramount+ ad supported tier would bring incremental benefit to our digital advertising offering as well as an additional marketing and promotional value and it would provide an opportunity to upsell to Paramount+ with Showtime,” he added. “As a result, these deals, when structured with the right economic value have the potential to be additive to our model while improving simplicity and increasing value for the consumer. As a related point, it's worth noting that we have already finalized agreements with multiple distributors to offer Paramount+ with Showtime to their customers as a true multi-platform product. Importantly, this includes linear subscribers getting app credentials. That's where we are and where we're headed on distribution.”

A new startup founded by PlutoTV co-founder Ilya Pozin has launched its first TV set, a 55-inch 4K HDR TV with an integrated second smart screen. The new company, dubbed “Telly” is now taking reservations to give them away for free to the first 500,000 U.S. customers.  

The company—which Pozin founded after selling PlutoTV to Viacom for $340 million in 2021—is subsidizing the cost of the sets by using the second screen to constantly show ads. The new form factor combines the cinematic picture quality of a  55" 4K HDR Theater Television Display with a separate built-in Smart Screen to show additional graphics and ads. The two screens are integrated by a premium sound bar. Telly is powered by TellyOS, which is designed for dual screens.

The company announced it has opened the reservation system at www.freetelly.com for the first 500,000 free units that will begin shipping to consumers this summer. 

Telly says it will “disrupt’ the industry by offering the industry’s first smart second screen as well as enabling advertisers to fully subsidize the cost of the TV itself for the consumer, and deliver it completely for free.

"Telly is the biggest innovation in television since color," said Pozin, Founder and CEO of Telly. "Telly is a revolutionary step forward for both consumers and advertisers. For too long, consumers have not been an equal part of the advertising value exchange. Companies are making billions of dollars from ads served on televisions, yet consumers have historically had to pay for both the TV and the content they watch. All of that changes today. When I co-founded Pluto TV, we created an entirely new model that offered amazing TV content to viewers for free. Now, with Telly, we are providing the actual television for free as well." 

Features include:

• Smart Screen: Telly's Smart Screen lets viewers stay up to date with the latest news, sports scores, weather, stocks and more.
• Video Calling:
• Video Games:
• Music: Play songs from popular music services on Telly's stunning built-in five-driver sound bar.
• “Hey Telly AI-drive voice assistant:
• Free advanced motion-tracking fitness programs

Viewers can connect the streaming dongle of their choice via three HDMI ports and Telly will ship with a 4K Android TV streaming stick. 

"While everyone talks about Smart TVs, the reality is that TVs have not changed dramatically over the past couple of decades and the dream of truly interactive TV has never materialized," said Richard Greenfield, General Partner at LightShed Ventures, who co-led Telly's latest funding round. "Telly is a huge leap forward, leveraging the explosion of the connected TV ad market and the desire from consumers for greater control and interactivity that does not disrupt the TV viewing experience. The groundbreaking dual screen design enables advertisers to completely reimagine the living room experience while providing consumers an incredible TV at the easy-to-say-yes-to price of free." 

NEW YORK—Paramount Global’s streaming operations added record numbers of subscribers but advertising revenue in its broadcast and cable networks fell sharply in Q4 2022 as operating income for all of 2022 fell to $2.3 billion, down from $6.3 billion in 2021. 

In Q4, 2022, Paramount+ added record 9.9 million subs and grew revenue 81% year-over-year as total Paramount+ subs reached nearly 56 million. Global direct-to-consumer (DTC) subs rose by 10.8 million to more than 77 million at the end of 2022. 

Pluto TV also added 6.5 million global monthly active users (MAUS), reaching nearly 79 million. 

Overall, DTC revenue increased 30% year-over-year as Paramount+ revenue grew 81% year-over-year while subscription revenue grew 48% year-over-year, principally reflecting paid subscriber growth on Paramount+ and advertising revenue rose 4% year-over-year, the company reported. 

But OIBDA (operating income before depreciation and amortization) losses in the DTC segment grew to a $1.81 billion loss in 2022, up from a $992 million loss in 2021. 

Among its broadcast and cable networks, advertising declined by 7% in Q4, 2022 and affiliate and subscription revenue dropped by 4%. As a result OBIDA fell to $5.45 billion in 2022 down from $5.89 billion in 2021. 

NEW YORK—Viacom has announced that it is acquiring Pluto TV, a five year-old free ad-supported streaming network for $340 million in cash.

Pluto was founded in 2013 and offers more than 100 channels and thousands of hours of on-demand content spanning television, movies, sports, news, gaming, etc. The network has established partnerships with more than 130 media companies including major film and television studios and a variety of digital content producers.

It has more than 12 million monthly active users, 7.5 of whom are on connected TVs, and is also supported by all major streaming devices including Apple TV, Roku, Chromecast, Android TV, Amazon Fire TV and Sony Playstation consoles as well as integrated into Samsung and Vizio smart TVs. Pluto says it has “also secured new distribution deals that will make the service available on tens of millions of additional devices in the coming months."

With competitors such as AT&T, Disney and Comcast’s NBCUniversal planning to launch direct to consumer streaming services this year, Viacom—which doesn’t have any local broadcast stations or sports rights—will be able to use the acquisition monetize its content and help expand the universe for its cable channels—including Comedy Central and MTV—whose future existence could be threatened by cord-cutting and pay-TV subscriber losses.

“Today marks an important step forward in Viacom’s evolution, as we work to move both our company and the industry forward. Pluto TV’s unique and market-leading product, combined with Viacom’s brands, content, advanced advertising capabilities and global scale, creates a great opportunity for consumers, partners and Viacom,” said Bob Bakish, Viacom President and CEO. “As the video marketplace continues to segment, we see an opportunity to support the ecosystem in creating products at a broad range of price points, including free. To that end, we see significant white space in the ad-supported streaming market and are excited to work with the talented Pluto TV team, and a broad range of Viacom partners, to accelerate its growth in the U.S. and all over the world.” Viacom’s global footprint, portfolio of entertainment brands, deep content library and additional marketing resources will further enrich Pluto TV’s product and consumer experience and provide a clear roadmap for international expansion.

“Since our launch less than five years ago, and particularly over the past year, Pluto TV has enjoyed explosive growth and become the category leader in free streaming television," said Pluto TV CEO and Co-Founder Tom Ryan. "Viacom’s portfolio of global, iconic brands and IP, advanced advertising leadership and international reach will enable Pluto TV to grow even faster and become a major force in streaming TV worldwide. Viacom is the perfect partner to help us accomplish our mission of entertaining the planet.”

Ryan will continue to serve as CEO of Pluto TV, which will operate as an independent subsidiary of Viacom upon closing of the transaction. The transaction is expected to close in the first quarter of 2019 and is subject to customary closing conditions and regulatory approval.