Viacom President James Currell has said the company is focused on building scale in ad-supported streaming, claiming that the global SVOD sector is becoming too “crowded” and “capital intensive”.
Speaking at the IPPR Oxford Media Convention yesterday, Currell, who is President of Viacom International Media Networks (VIMN) in the UK, Northern and Eastern Europe, said that the world’s biggest entertainment companies are pivoting their digital video strategies towards “twin poles” of premium and free.
While he spoke about the next wave of major SVOD service launches from major global players like Disney and Time Warner, Currell said it is notable that Amazon, one of the biggest players in the SVOD space, has launched an ad-supported offering in Freedive.
Viacom has planted its flag in the AVOD market with its recent US$340 million acquisition of US-based streaming television service Pluto TV and plans to use its content library to accelerate the service’s international rollout, starting in Latin America.
However, the company is not ruling out more selective moves in the SVOD space. Currell said Viacom believes that it has “significant potential” to move further into premium “if or when that proves expedient,” citing previous launches like its MTV Play app, pre-school service Noggin, and Nordic streaming service Paramount+.
“It’s clear to us that ‘premium’ doesn’t just mean high-end scripted TV and movie content. It will mean different things for different audiences – reality, animation, comedy, music, sport – with specialist subscription streaming services beginning to emerge.”
The comments came against a backdrop of observations about shifting viewing habits and structural change in the TV space, with Currell referencing a “tipping point” in digital viewing: “The question is no longer will the transition to on-demand continue, but how fast and what will be the impact on existing business models?”
He predicted that growth in linear TV distribution revenues will slow while SVOD revenues “forge ahead” and that ad spend will shift from 30-second TV spots to addressable digital video solutions. He also warned that companies without the scale, content libraries and balance sheet to offset squeezed margins in their core TV business “face a future of managing decline.”
While local broadcasters are likely to face the biggest challenges, one advantage they do have is their track record for creativity and talent discovery. Currell noted that since Viacom acquired UK commercial broadcaster Channel 5 it has shifted spend away from acquired content to local origination.
He highlighted the benefit of the Channel 5 deal by saying: “Owning Channel 5 has brought us the scale, the content, and balance sheet strength locally to thrive in our most valuable international market – irrespective of the rate of transition from linear to digital.”
On the topic of regulation, Currell said that Viacom believes the rules governing broadcast and online media should be equalised and that the government should legislate to ensure public service prominence rules evolve and apply across platforms and devices.
However, he added that, as a commercial media company, Viacom is “uncomfortable with relying too heavily on regulatory solutions to market issues.”
“We believe there is more local broadcasters can do collectively, as well as individually, to help themselves,” he said referencing collaboration opportunities both in addressable advertising and content distribution.
Currell oversees Viacom’s media networks and related businesses in 36 European countries, including the UK, Nordics, CEE, Russia and CIS regions. He looks after a portfolio of brands that includes Channel 5, MTV, Comedy Central and Nickelodeon and reports to VIMN president and CEO David Lynn.
