Viacom, on Tuesday, has revealed that it has agreed to buy the Los Angeles-based, video streaming service, Pluto TV, and will be paying $340 million in cash for the acquisition.
The streaming service was founded by Pluto Inc. in 2013, which is a multiplatform service. It works like an app and runs over devices like Apple TV, Android TV, Amazon Fire TV, Chromecast, Roku, and PlayStation consoles. The Internet-based service does not require any cable connection and streams more than 100 channels. It also supports on-demand content like movies, sports, news, comedy, cartoons, gaming, etc.
The acquisition of this ad-supported service is an initiative from Viacom, through which the company will enter into the wireless video streaming business and cut the cord for the consumers. With the takeover, the company will also get the chance to negotiate with the other pay-TV distributors and expand its own presence in the streaming TV business as well.
The owner of MTV, Comedy Central and VH1, Viacom, has seen a fall in its profits by 50% in the past five years, so the decision to acquire a streaming service might prove as great help for the company, since right now it needs to be relevant to the current trends to remain in the business.
The CEO of Viacom, Bob Bakish, said in a statement, “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.”
Having over 12 million monthly active users, Pluto TV, automatically, will provide Viacom with direct access to millions of consumers. After completion of the acquisition, the company also plans to add a premium, free service for broadband-only and other subscribers.
Pluto TV will be operating as an independent subsidiary of Viacom, and the current CEO of the company, Tom Ryan, will serve as the same, even after the acquisition. The transaction may close in the first quarter.
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