Viacom CFO Wade Davis Sees Strong Future in 'Free Price Point' TV Bundles

February 5, 2019

By Chloe Aiello

Viacom CFO Wade Davis says the company's recent acquisition of Pluto TV gives it a competitive advantage as it vies for consumers in a saturated market.

"The market for video products has been segmenting for some time now," Davis told Cheddar Tuesday. "With this segmentation, consumers have become a lot more value conscious, and we think that that underscores the opportunity in what we talk about as the free price point."

Last month, Viacom ($VIA) acquired Pluto, a free, ad-supported streaming platform, for $340 million. It claims an audience of 12 million, and differs from other free platforms like YouTube, because it offers traditional television channels, rather than user-generated content. (Disclosure: Cheddar is a streaming partner of Pluto.)

"One of the things that really differentiates Pluto is the fact that, although it has a big on-demand library ... the majority of its content consumption is on its linear channels-like experience. And so, we view having a very familiar TV-like interface as a very differentiating part of the offering."

When asked whether Viacom would launch its own subscription streaming service to rival the likes of Netflix (NFLX) or Hulu, Davis said Viacom already has "very targeted subscription streaming offerings," like Noggin, Comedy Central Now, NickHits, and a recently announced MTV streaming offering.

Pluto "can be used to upsell and can also be used to manage churn out of subscription products," Davis added.

Viacom reported mixed earnings and revenue on before the bell on Tuesday. The media giant beat earnings forecast by Wall Street analysts, but slightly missed on revenue due to weak ad sales, Viacom reported. Davis said the company expects comparable performance next quarter.

"Once you take into account the effect of Easter that's going to impact the second quarter negatively. But we are still seeing a projection for full-year growth overall for domestic ad-sales," Davis said, adding that growth in the second year could offset some of the softness in the first half.

For full interview click here.