For older television audiences raised on cable, ViacomCBS’ free ad-supported Pluto TV service might be a flashback to their youth: hundreds of genre-specific linear channels to flip through while navigating via a helpful on-screen program guide.
But Pluto TV execs chuckle as they share a very different reaction from the under-25 Netflix generation. That demo isn’t used to channel surfing and tends to find the whole thing novel as it un-ironically raves about the “innovative user interface.”
“We’re almost like the resurgence of vinyl,” quips ViacomCBS streaming president and CEO Tom Ryan, who co-founded Pluto TV four years ago. “Here comes something that is in some ways nostalgic and reminds people of something that is comfortable to them. While the backdrop for a lot of the industry has been about how linear is declining and people don’t like linear — I just think that’s fundamentally false.”
Instead, audiences are doing something unthinkable in this age of ad-free subscription-video-on-demand services: They’re tuning in to linear channels with names like TV Land Drama, Spike Outdoors, All Reality WE TV, Johnny Carson TV and Pluto Suspense, and watching them live with (gasp!) commercials.
If these sound like the names of regular channels, that’s by design. Many of them are offshoots of actual cable brands — particularly from the ViacomCBS portfolio, including the revival of Spike TV (the linear Spike channel that was rebranded Paramount Network in 2018); a curated Showtime offering playing the network’s older hits; a “Star Trek”-themed channel; regional CBS news networks; and multiple MTV channels that actually play music videos. Also, as in the early days of cable (remember Superstation WTBS?), much of the programming mix is library content that would otherwise be collecting dust.
Scott Reich, senior VP of programming, employs a team of about 20 people who manage Pluto’s offerings, such as a former mixed martial arts champion handling boxing and MMA fare; former journalists curating its news and opinion networks; a onetime comedian who oversees comedy channels; and a die-hard gamer/anime fan programming those genres.
“We get together multiple times during the week to see what’s working, what’s not,” Reich says of Pluto’s constantly evolving channel mix. “If we have three channels that seem similar and they’re not doing great, we’ll collapse them into one channel and see if that performs better. We’re constantly tinkering. It’s a little bit of Tetris meets Jenga of not only audience behavior but also monitoring window rights.”
Pluto TV is at the forefront of the “FAST” — free, ad-supported television — trend in streaming that also includes Comcast’s Xumo and Peacock (both of which feature similar grids of channels), as well as on-demand entities like Fox’s Tubi and Chicken Soup for the Soul’s Crackle.
The friction to entry is minimal: No sign-ups are required, which limits data collection on things like demographics, but Pluto execs say they’d rather build a large-scale audience first. A lot of the growth can also be attributed to placement on smart TVs like Samsung and Vizio, which come with FAST offerings powered by Pluto, while Xumo has deals with LG and Samsung as well.
Pluto channels feel like they’re mostly on autoplay, but the curators do aim to schedule them strategically (airing Christmas episodes during the holidays, for example). And they are starting to get a bit more creative with programming and scheduling, just like traditional cable: Pluto’s BET channels recently staged a Tyler Perry takeover (featuring several “Madea” films) to promote his shows on regular BET. As a result, “BET was the biggest channel we had in November,” Reich says. “We broke some records.”
The halo effect from other platforms works both ways. When Netflix launched a new version of “Unsolved Mysteries,” Pluto saw an uptick in interest for its channel that runs the original series wall-to-wall.
“Unsolved Mysteries” is an example of the popular Pluto TV channels that focus on one series or franchise. Among Pluto’s most watched is a channel featuring all four of the “CSI” series. Recently added is one devoted to nothing but old “The Price Is Right” episodes (including ones from the Bob Barker era), and its early success has blown away expectations. “Baywatch,” “Three’s Company,” “Beverly Hills, 90210,” James Bond movies, “This Old House,” “Hell’s Kitchen” and plenty of other series also have their own 24-hour outlets.
“I think there’s even more opportunity within the corporate ViacomCBS library that we are just beginning to mine,” Reich says.
Pluto has gone from fewer than 20 channels at launch, with mostly third-party branded channels and digital shorts, to more than 250 channels with focuses on movies, reality, crime, comedy, news, classic TV, home, sports, gaming, music, kids and Spanish language programs. Giving it even more of the feel of a cable lineup: Some traditional channels are in the mix too, like Bloomberg TV, Sky News, Buzzr and Court TV.
“We’ve evolved so dramatically since we launched some years ago, from short-form digital content to now what is almost entirely premium TV shows, movies and news,” Ryan says.
The proof is in the growth: When ViacomCBS acquired Pluto TV in early 2019, the service attracted 12 million monthly active users. By the end of 2020, with the benefit of ViacomCBS’ investment, Pluto TV was on track to reach more than 30 million in the U.S. and 40 million globally, where it’s available in 24 countries (with France and Italy set to come online in 2021).
That quick evolution might explain why ViacomCBS CEO Bob Bakish is so bullish on Pluto TV — to the extent that he put Ryan in charge of the company’s entire streaming business, including the soon-to-be-renamed subscription platform Paramount Plus (formerly CBS All Access).
“We saw white space in the market for a premium free service, and Pluto’s familiar channel-based, lean-back user experience was differentiated and complementary to the high-intent viewing of SVOD,” Bakish tells Variety. “I was also impressed by Tom Ryan, who not only had the vision for a category that didn’t exist yet, but he also knew how to get there and executed in a way that really matters.”
Ryan, who’s busy prepping the relaunch of Paramount Plus for later in the year, likes to point to the contrarian nature of Pluto TV: linear in the age of on-demand, ad supported in a time when audiences don’t watch commercials, and free in a time of subscription services.
“It was met with a bunch of resistance,” says Jeff Shultz, chief strategy officer and chief business development officer at ViacomCBS streaming. “Everybody thought it was nuts. When they looked at Pluto and they saw essentially a next-generation cable guide, they were sure that it wasn’t going to work. I love a good underdog story.”
Another big accelerator for Pluto TV and other FAST channels has been the rising tide of internet-connected TV sets in America’s living rooms (and elsewhere) that make it easy to flip around from live linear TV to apps like Netflix and Amazon to free streaming offerings.
“Connected television was an unbelievable tailwind to the business,” Shultz says. “It’s fair to say that the business could not have gotten as big as it did as fast as it did if it hadn’t been for the fact that people are connecting their televisions to the internet. And when you watch Pluto in your living room on a big screen, you watch it like TV. You watch it every day for hours at a time.”
Advertisers like that kind of engagement, so it’s no surprise that AVOD is expected to be the fastest-growing segment of the video business in the coming years. According to a recent Variety Intelligence Platform report on the state of FAST, Digital TV Research projects 100% growth between 2020 and 2025, to $53.5 billion globally.
Just last month, Fox Corp. chief financial officer Steve Tomsic said he expected the revenues of Tubi (which the company acquired in March) to surpass those of the Fox network in the next two to three years. And the industry is taking notice, as programmers are racing to start their own FAST channels and take advantage of these new buyers willing to purchase library content.
It also makes sense that as traditional cable penetration decreases, legacy companies and brands are looking to go where the audiences are. While ViacomCBS extends its cable brands to Pluto and NBCUniversal creates offshoots of its channels on Xumo and Peacock, A+E Networks and AMC Networks also have been in front of creating FAST channels with some of their older library fare. Not only are they eager to make sure viewers are still watching some variation of their brand, but they’re learning that the ad dollars aren’t bad.
“The FAST space was the big winner in the upfront,” says Kim Kelleher, president of commercial revenue and partnerships for AMC Networks, which curates channels such as Stories by AMC (featuring older episodes of network staples like “The Walking Dead”) and the comedy-centric Slightly Off from IFC. “It was part of every conversation. … I don’t think it’s a flash in the pan.”
According to Amy Kuessner, senior VP of content partnerships at Pluto, the company now has close to 300 content partners. While some, like A+E and AMC, program their own FAST channels, most license fare directly to Pluto and its in-house channels.
“We’re in business with all the major studios, all the big distributors, sports leagues and cable networks,” she says. At first, networks and studios were concerned about upsetting traditional cable and satellite operators. But with even Comcast getting into the FAST game, that fight hasn’t started yet. There’s somewhat of a fine line between a traditional first-run cable network and the FAST channels, but the main difference is FAST channels specialize in repeats that are at least 18 months old.
When FAST networks first started looking at acquiring programs, suppliers balked. They demanded traditional license fees, but in the early lean-budget days of FAST, everyone had to settle for a share of revenue. Now that the ad market in the space has exploded, everyone wants it. “If I propose a license fee, they want a rev share because they know how well the ad-supported marketplace is doing,” Kuessner says.
Now that the secret of FAST is out, Kuessner says she encounters companies begging for distribution of their FAST channels — which makes Pluto a new kind of MVPD. “Everyone and their mother is now creating FAST channels,” Kuessner says. “I get probably about 30 pitch calls a week. … They were so hesitant because of cable, and now it’s like the complete reverse of what they were doing.” A+E, for example, has more on the way, while AMC just added a WE TV Weddings channel to its growing FAST stable.
At least one company, FAST Studios, has launched to take advantage of the frenzy in the space. Founder Stuart McLean has assembled a staff of programmers, marketers and sales people to essentially operate the channels of any third party that wants to get into the game.
“We anticipate that [FAST] channels will really replicate cable-level quality in terms of everything from programming to on-air promos, all those things that go into making a cable channel look great,” McLean says. “Everything’s going to continue to upgrade until it just becomes ‘television.’”
