TBI Weekly: ViacomCBS, a US deal with global implications

L-R: Shari Redstone, Bob Bakish, Joe Ianniello

CBS and Viacom’s merger might have created a $30bn US-based content company but a foray into their assets reveals a swathe of interests that stretch far beyond American shores, with implications for companies in the UK, Argentina, Australia, India and beyond.

In one light, the deal is simply the latest salvo in the long line of American media M&A as corporations look for scale to vie with Disney, Netflix and Amazon. The fact that the same company – National Amusements – held controlling stakes in both outfits only makes the long-awaited tie-up more logical.

Star Trek: Discovery

And with US networks such as CBS, Showtime, Nickelodeon, MTV, BET and Comedy Central all under one roof – in addition to production stables such as CBS Television Studios and Paramount Pictures – savings of around $500m were immediately mooted on the company’s recent investor call.

While that gamut of US-facing brands is impressive, ViacomCBS is also now home to a bevy of interests around the world that at once seem disparate but could soon become intertwined. In Australia, CBS owns Network Ten, while on the other side of the world Viacom has been in control of fellow commercial broadcaster Channel 5 since 2014.

Viacom also has interests in India through Viacom18, a network of more than 40 channels majority controlled by Reliance Industries, while its 2016 acquisition of Argentinean broadcaster Telefe gave it a foothold in Latin America.

Globally-facing CBS Studios International is also behind networks such as CBS Drama and CBS Reality that stretch across Europe and the Middle East, while programming from its US cabler Showtime struck a rich deal with pay TV operator Sky in 2016, allowing it to offer series such as Billions and The Affair.

Just how Viacom and CBS will look to combine their global operations remains to be seen but there will surely be consolidation to bring the companies’ respective sales arms together, just as we’re seeing with NBCUniversal and Sky, Fox and Disney.

Billions

That combined operation will then be home to a diverse array of content ranging from reality series such as Jersey Shore, to kids shows including Winx Club, and classic drama franchise NCIS. In total, ViacomCBS will house around 140,000 TV episodes and 3,600 films, with more than 750 series currently ordered or set for production.

But ‘synergies’ will surely extend further in time. Since Viacom’s takeover of UK network Channel 5, it has become a more boisterous and ambitious operation, using the clout of its backing to commission more on the one hand while being fed with shows from its US parent on the other.

Whether more CBS shows will also be delivered to the UK network – which also has a streaming service – remains to be seen, but in a world that is increasingly vertically integrated, it would make sense in the same way that it seems logical to assume that more Viacom series will end up on Network Ten in Oz.

Co-productions may also become more apparent, although there are some immediate partnerships already in place – such as the remake of 100 Days To Fall In Love, which was first produced by Viacom’s Telefe in Argentina and is now is development with CBS-backed Showtime. The Spanish-language comedy, which is being developed by Viacom International Studios and Paramount TV, marks the first major English-language adaptation of a piece of Telefe IP.

Meanwhile Viacom’s recently acquired AVOD outfit Pluto, which is growing in the US and across Europe, has already become a central plank for the Bob Bakish-helmed company, with a bolstered line-up thanks to Viacom shows. CBS programming looks set to head the same way, once existing deals run to their conclusion.

Yet in the immediate future at least, Bakish seems content for ViacomCBS – with its substantial production interests, including Viacom Studios International – to continue selling its wares to third parties, including streamers.

But as Ianniello, president and interim CEO at CBS, admitted, while third-party licensing will continue “internationally and domestically” he conceded that “[in] the longer term, obviously, the aspiration is to have global subscribers and really connect to the consumer.”

Winx Club

Then there’s the little matter of CBS All Access, the Star Trek: Discovery-Commissioning SVOD in the US that has already been eyeing up an international roll-out. Bakish welcomed the service to the Viacom fold earlier this week by saying it would join “a compelling portfolio of streaming products,” which include subscription and ad-based offerings such as Showtime OTT, Pluto TV and niche services such as Noggin and forthcoming BET+.

And yet despite such an array of platforms and production assets, the deal had barely been announced before attention turned to just how this newly wedded company might compete with its much larger US-based rivals.

At its heart, the deal was about building scale in a country – and an industry – where size has never been more important. Disney, Apple, WarnerMedia and NBCUniversal are all preparing to launch salvos in the direct-to-consumer war over the coming months, with international roll-outs likely from all.

That had left CBS and Viacom looking rather exposed prior to the merger, and it was little surprise that reports emerged suggesting Shari Redstone, chairman of National Amusements, had considered selling both companies rather than merging them prior to the tie-up. Despite its US and international implications, there remains no certainty that the creation of a $30bn media business will be sufficient to ward off competition from the incumbent US-based giants.