Matching Pluto TV could bankrupt European broadcasters

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This week, Viacom paid $340 million in hard cash to buy the US-based free streaming service Pluto TV.

Investment analysts from Deutsche Bank say: “this represents another indicator of the potential size of reinvestment required from traditional broadcasters in respond to changing viewing habits.”

While Viacom is best known for appealing to younger viewers (whether through its Nickelodeon family or MTV/Comedy Central offerings), it clearly recognises that these are the very viewers who are most tempted to abandon traditional viewing.

The bank’s note says that this makes them most analogous to European broadcasters.

“We have highlighted that, after advertising downgrades, this is the next leg of downside for European TV. In particular, we expect the quantification of spend on new SVoD services from RTL to surprise negatively for RTL at full year results on 13th March. But others will need to follow. As highlighted in [our recent] ProSieben sounds reinvestment warning over European TV: 12 Nov 2018, we highlighted that leaders like Pro7, RTL, TWX have already spent E300m-600m on building ad-tech stacks and SVoD; ITV, TF1, Mediaset Espana, AtresMedia, M6 have spent <E50m (all rated SELL) and have online revenues <5 per cent of total sales.”


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