- CBS and Viacom’s merger puts the company’s value at $30 billion
- The agreement is in principle and closing is “likely several months away”
- CBS + Viacom will become the fifth-largest media company by market cap
After years of on-again, off-again negotiations, CBS and Viacom have agreed to merge, according to the Wall Street Journal.
The new company, called ViacomCBS, is valued at $29.7 billion, behind only AT&T, Disney, Comcast and Netflix for media companies.
“As we all know, there is a race to create more of the best content,” CBS CEO Joe Ianniello wrote in a memo to employees. “We are already leaders in this regard, and today’s news will accelerate our global ambitions.”
Viacom CEO Bob Bakish echoed those sentiments in his own memo: “Between us, we also boast one of the most innovative, diversified collections of digital assets in the industry. Make no mistake, together we aren’t just bigger — we are much, much better.”
The deal will give each company a better shot at competing in a TV landscape trending towards cord cutting. (According to research from Deloitte, more people now have a streaming service than a traditional TV subscription.)
So far, they’ve both adapted to streaming in different ways. CBS has around eight million subscribers combined between its much-maligned CBS All Access and Showtime streaming services. (CBS doesn’t disclose specific numbers for each platform, but has indicated in the past that it’s a fairly even split.)
That’s well behind Netflix’s 151 million and Hulu’s 28 million, and the field is only getting more crowded. It’s hard to imagine CBS in its current form competing with newcomers Disney+, HBO Max, NBCUniversal and Apple TV+ as they debut over the next year.
According to research firm Magna Global, 29% of TV watching is done via streaming, but only 3% of ad-spending currently goes towards it. And that ad-spending is incredibly lucrative: Hulu reportedly generates $15 in revenue each month for each of its $6/mo. subscribers.
Pluto TV has exploded since Viacom purchased it, reaching 18 million active users in July, up 50% from January. This growth, coupled with CBS’s trove of assets, has analysts optimistic about the merger.
“The combination of CBS-Viacom will create the second-largest player in U.S. TV advertising with strong linear reach and a growing digital footprint,” wrote Michael Nathanson at MoffettNathanson.
“CBS’s and Paramount’s production asset will quickly move up the ranks to challenge the big boys of Disney, Comcast, AT&T and Netflix, and will be an attractive home for creative talent.”
So what will a CBS + Viacom streaming service look like?
CBS and Viacom have a number of popular shows already in their arsenals, and could create an appealing package for consumers.
Here are some of the popular shows that could be included in a combined CBS and Viacom streaming service:
- 7th Heaven
- Basketball Wives
- Beverly Hills, 90210
- The Big Bang Theory
- Blue Bloods
- Broad City
- Chappelle’s Show
- The Daily Show with Trevor Noah
- Everybody Loves Raymond
- The Good Wife
- Hawaii Five-O
- Jersey Shore
- The Late Show with Stephen Colbert
- he Late Late Show with James Corden
- Love and Hip Hop
- Nurse Jackie
- RuPaul’s Drag Race
- Sabrina the Teenage Witch
- South Park
- Star Trek
- Star Trek: The Next Generation
- Teen Mom
- The Twilight Zone
- Twin Peaks: The Return
It’s possible that a combined streaming service could include live TV from CBS, too — one of the perks of CBS All Access. This would allow viewers to watch a number of NFL games, the Grammys and college football.