Viacom spent $340 million on Pluto TV to get into free streaming

Viacom is buying its way into the ad-supported streaming video business by acquiring Pluto TV in a $340 million cash deal, B&C reports.

Pluto TV launched in 2014 and originally wove video from other sites like YouTube into round-the-clock streaming “channels.” Since then, it’s focused on making deals with content providers and launching branded channels such as CBS News, Cheddar, Stadium, The Onion, and IGN. Pluto’s app looks a lot like a cable TV guide, with a grid of live channels, but it also offers a selection of on-demand movies and video. The service supports most major streaming platforms and is built into Vizio’s and Samsung’s smart TV software.

The deal underscores media companies’ growing interest in free, ad-supported streaming as an alternative to taking on Netflix, Amazon Prime, and Hulu (plus Apple, Disney, and AT&T’s WarnerMedia later this year) in the paid subscription business. Last week, mega-broadcaster Sinclair launched a free streaming service called Stirr, while Comcast’s NBCUniversal announced plans for its own service (free for pay TV customers, but roughly $12 per month for non-subscribers) in 2020. Amazon also launched a free streaming service through its iMDb brand earlier this month.

By acquiring Pluto TV, Viacom gets an instant audience of more than 12 million monthly active users, with more likely on the way through additional TV distribution deals. Although Viacom isn’t moving its new programming outside the cable bundle anytime soon, Pluto’s app would be an obvious home for older movies and shows. Based on B&C‘s report, it sounds like international expansion may be in the cards as well. Pluto TV CEO Tom Ryan will continue to run the company as an independent subsidiary.