I'll probably be coming back to connect some more dots -- it's a complicated story -- but there's been an interesting development in the streaming television industry which doesn't quite jibe with the some of the assumptions that are essential to the standard narrative.
Specifically, the future of television is the Netflix, single-tier, all-you-can-eat model. No ala carte, no ad-based approaches. The services that survive will bell the ones that create the most compelling (i.e. buzzworthy) original content. There is a reasonable chance that this will end with Netflix holding very close to a monopoly over the world market for movies andd television.
Both investors and journalists have embraced these assumptions, and their support have propped up the whole enterprise, but other than that, there has never been much evidence in support and more than a little that seems to go against them.
We've already discussed the rise of the terrestrial superstations starting with Weigel's MeTV. This model, based on ad revenue, older established programming, and minimal spending on original programming, has proven extraordinarily profitable.
With that in mind, the advent of Pluto TV (joining services like Amazon's Freedive and the evil but generally competent Sinclair's Stirr) is worth noting.
From the Hollywood Reporter:
As its competitors rush to launch Netflix-style subscription streaming services, Viacom is making a bet on free programming.
The company is paying $340 million in cash to acquire free streaming service Pluto TV, which it plans to use as a distribution outlet for digital programming from brands like Awesomeness and as a marketing tool for its portfolio of media brands. The deal is expected to close during the first quarter of the year.
"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," CEO Bob Bakish said Tuesday in a statement announcing the purchase. "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."
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