The saga of the Viacom and CBS relationship is a strange one, worthy of the most unlikely of soap operas, or the most outlandish of Greek myths. CBS gave birth to Viacom, then spun it off, then married it, then acrimoniously divorced it and, now, has married it again.
In the 60s, CBS was the most powerful and revered of the US networks; famous for its prestigious news division, it was also churning out hits like Hawaii 5-0 and Gunsmoke and making a nice profit on them, and many other producers shows, in secondary syndication. But then the FCC outlawed networks doing their own syndication and Viacom was spun-off.
Sumner Redstone, who had turned his father’s National Amusements business into the biggest cinema chain in the US, bought it, and so began a long and complicated relationship between the Redstone family, Viacom and CBS.
Viacom became one of the titans that made the weather in the 80s and 90s new media with MTV networks, Showtime, Paramount Studios, Blockbuster, DreamWorks and more. In 2000, it was crowned with the first merger with its old parent CBS. It lasted until 2006 – though Redstone retained an effectively controlling interest in both companies and was chairman of both until recently.
His daughter, Shari, with whom Sumner has feuded off and on, remains deeply involved and will become chair of the new ViacomCBS. The new company has described itself as “a leading global, multiplatform, premium content company, positioned to be one of the most important content producers and providers in the world … creating a combined company with more than $28 billion in revenue”.
‘A leading’ is interesting; certainly true, but there is still the whiff of two – admittedly huge and content laden – media entities who are ‘drowning not waving’ and clinging together comfort. $28 billion is big, but is put in context by AT&T’s $178 billion or Comcast’s $95 billion. MTV was the media brand of the 80s and 90s, the game changer. Not anymore, and there is no Viacom property in the acronyms – FAANG, GAFAM – that define today’s landscape.
In a detailed prospectus for the new company there is a heavy emphasis on the rapid development of a D2C strategy, where its biggest brand, in an already crowded area, is Pluto TV. Which kind of says it all. Unless the merger does double down on breaking through with some real innovation in D2C, this is unlikely to be the last deal for ViacomCBS.