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Viacom Agrees to Acquire Ad-supported Streaming Service Pluto TV

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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.

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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.

Netflix Rising Prices for its US Subscribers

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The popular streaming service Netflix, on Tuesday, announced that it is going to raise the subscription fees for its new users, starting from the 1st February 20019, and will be doing the same for its existing subscribers after three months. The price rise will be between 13 to 18 per cent of the present plans, which is the highest, in more than two decades of its functioning.

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Netflix’s cheapest monthly subscription plan is of $7.99, which now will be $8.99, and the most popular plan of Netflix, streaming HD on two different devices, currently costs $10.99 for a month’s subscription, will be raised to $12.99. Also, the four devices plan, the premium plan for 4K streaming, will be raised from $13.99 to $15.99 per month.

The reason Netflix gave for the rise in the prices is that it has been investing a lot in its original series’. The hike in the subscription plans will help it financially to focus more on the original programming.

“We change pricing from time to time as we continue investing in great entertainment and improving the overall Netflix experience,” a representative at Netflix, said.

Currently, more than 58 million people are subscribed to Netflix in the US only, and the last hike it had put on the subscription fee was in 2017. But this time the price rise is way higher, that may attract some criticism. Also, the raised cost may affect Netflix’s new subscribers, and it may face a number of cancellation from its existing users.

In 2011, the company had divided its movie rental service, leading to two subsequent services, one had the movie streaming over the internet, and the other was the DVDs in the mail service. This had caused a lot of criticism, and Netflix lost over 80,000 subscribers at once. At the same time, Netflix’s stock price also had dropped 77 per cent in just four months.

“The Black Mirror”, “Orange Is The New Black”, “Stranger Things”, and now “BirdBox”, Netflix has been providing with unique quality content over the years, and for keeping up with the competition, the company is pushing its limits. Raising the prices will certainly work well for Netflix, but are the users ready to pay that much?