Star Trek is ViacomCBS’s best hope for streaming greatness
CBS and Viacom are set to become a potential powerhouse in streaming, rivaling Netflix. But where Netflix focuses on building a universal library of originals, ViacomCBS is set to overwhelm rivals with content drawn from dozens of smaller channels, many of which have years’ worth of content in the bank.
Viacom and CBS executives announced yesterday that they had come to a unanimous agreement to merge both companies, reuniting the brands for the first time since they split in 2005. The intention to combine the two brands was clear from the get-go: in order to compete with giants like Disney, Netflix, Amazon, and WarnerMedia, Viacom and CBS had to get bigger. With the new merger in place, ViacomCBS could be ready to do just that.
“As we recombine, I look forward to the way that we will grow these companies, where scale is becoming more and more important all the time,” acting CEO Joe Ianniello told investors.
Almost immediately, CBS and Viacom went from two minor players in the streaming wars to one of the powerhouses. Viacom will bring along networks like Nickelodeon, BET, MTV, and Comedy Central, and all of the shows that currently air on those stations. Together, the companies offer a library of more than 140,000 TV episodes and 3,600 movies, making it one of the biggest catalogs available anywhere. That includes new shows, like Star Trek: Picard as well as older episodes of popular shows like SpongeBob SquarePants, The Good Wife, and NCIS. Movies, like the Transformers, StarTrek, and Mission: Impossible franchises will also be offered. It might take some time before ViacomCBS gets the exclusive streaming rights back, but it seems like the obvious endgame.
“My bet is that streaming through CBS-Viacom is going to dramatically scale in subscribers,” Eric Schiffer, a streaming analyst at Patriarch, told The Verge. “And that will only go further with even more acquisitions. This is now a platform to stack a lot of other things. Their strategy is they’re going to stack.”
There are easy comparisons between ViacomCBS’s outlined plan and Disney’s. Disney is going to leverage its major film pillars — Marvel, Pixar, Disney Originals, and Lucasfilm — to create exclusive content for Disney+. The plan is to also use popular characters from certain franchises like the Marvel Cinematic Universe to make original TV shows. Those series will connect to the larger films and create a multiplatform universe. ViacomCBS is planning to follow suit with two franchises whose rights now belong to one company again: Mission: Impossible and Star Trek. It’s a major advantage that Disney and ViacomCBS have over streaming-only platforms like Netflix.
Ianniello wasted no time in making that advantage obvious, telling investors that Star Trek and Mission: Impossible can lead to content “across all the companies’ platforms.” That means they could be shows on All Access, theatrical release movies (which will eventually land on All Access), and maybe animated shorts on Pluto TV, a free streaming service that is now part of the ViacomCBS family. The ludicrous amount of intellectual property that one company owns is more like Disney or WarnerMedia’s HBO Max than Netflix.
The merger is coming at the perfect time, as nearly every media company in the game looks to get into streaming. In less than a year, people will go from having a couple of streaming options — mainly Netflix, Hulu, CBS All Access, and Amazon Prime Video — to having more than they can count. Disney, HBO Max, NBCUniversal’s upcoming streaming service, and Apple are all launching their own services that will fight for people’s attention, and that’s without counting experimental streaming platforms like the short video-focused Quibi or wild card players like WWE.
“Their usage and entertainment budget is going to be seen through the lens of shows they watch that they can’t live without,” Stephen Beck, a partner at consultancy group cg42 and streaming expert, told The Verge. “The average person only has so much they can spend on entertainment. When the bills start to pile up, the question becomes: who will the consumer cut?”
Prior to the merger, CBS’s All Access service might have been the easy choice to cut. The service is constantly plagued by technical issues, making the actual act of watching a chore. Original series like Star Trek: Discovery, The Good Fight, and The Twilight Zone are all critically well-received but don’t seem to have the same fanfare as Netflix’s Stranger Things or Hulu’s The Handmaid’s Tale. People are also shelling out $10 a month for an ad-free experience, which is more expensive than Disney’s incoming Disney+.
After the merger, All Access will be much more of a focus, according to both Schiffer and Beck. ViacomCBS now has more than $28 billion in revenue, and it’s set to invest $13 billion in original content this year. That spending level places it on the same level as WarnerMedia and Netflix (although, it’s still far under Disney’s reported $22 billion investment in content, with $1 billion set aside for Disney+). They could also bring the price down or invest in bundle offerings, similar to what Disney did with Disney+, Hulu, and ESPN+.
“You’re going to see a lot more going to CBS All Access, and they may even rebrand it, potentially,” Schiffer said. “They also have Pluto TV, so you get a free video-on-demand solution that is interesting and compelling. It keeps them relevant with millennials. They own a seat at the table.”
CBS already dominates traditional TV when it comes to its global distribution size, so finding a way to integrate that audience into CBS All Access subscribers is the next natural step. It’s also a major advantage that few other companies have. CBS used the summer, which is usually a dry season for television, to air the first season of The Good Fight, an All Access exclusive. The goal was to bring more attention to the series, which critics loved, and move its non-streaming audience over to All Access.
ViacomCBS suddenly has the potential to create a streaming service that customers — and creators — pay attention to. Beck argues that any major plays that ViacomCBS makes “are only going to be as good as the content they release.” CBS and Viacom have a large library of content and are clearly invested in doing more. This deal was all but spurred by the rapid shift to an internet-first mindset. Like Disney, ViacomCBS also plans on growing very fast. If it’s going to take the lead in the growing streaming war, it’ll have to.