Race Against Time

Like two gauche teenagers who finally start to make out as the dance floor empties and everyone else is looking for their ride home, Comcast and ViacomCBS have hurriedly agreed to fold their international media assets together, starting in Europe.

The two U.S. giants are hatching a new SVOD service, SkyShowtime, to take on Netflix and other rivals in more than 20 European territories (see story below) following conversations between their respective CEOs that began only in June.

The partnership—which will be structured as a joint venture, with equal investment and joint control by ViacomCBS and Comcast—is the latest example of global media groups racing to bulk up as they try to establish a global streaming presence before it’s too late. Neither WarnerMedia nor Discovery felt they had sufficient heft on their own to compete on the world stage against the likes of Netflix and Disney. And even Amazon felt compelled to pay over the odds for MGM as it looks to keep up.

And that’s just under the current economic models. If Scarlet Johansson succeeds in winning a bigger share of the streaming spoils on behalf of talent participants (see also below), then even the dominant platforms face an even longer battle ahead before they start paying down their streaming debts.

This latest dalliance between Comcast and ViacomCBS might look like a desperate summer fling but it is also a shrewd act of opportunism. Agreeing to pool content and technology resources in countries like Denmark, Finland and Hungary is a cost effective way for both giants to expand at speed into smaller markets, each of which come with their own local complexities. Time is of the essence here. Many of those regions are where Netflix also needs to build up subscriber bases. What’s more, Disney Plus hasn’t even launched in much of Central Europe. And a delayed HBO Max, currently focused on Latin America, is also likely to be added to the mix next year, by which time it will part of the Warner Bros. Discovery empire.

Comcast still insists it will launch Peacock alone in Latin America, Australia, Asia, France and several other markets. But other dances—and dance partners—surely beckon, particularly given the turbulent market dynamics at play in many of our other top stories in this week’s newsletter:

  • It’s official: Comcast, ViacomCBS tie the knot in Europe. How does Paramount Plus fit in?
  • Paws for thought: will families ever leave the couch for the cinema?
  • What Is the fallout from Johansson’s public battle with Disney?
  • Netflix unveils its huge autumn and winter movie line-up; will it pay off?
  • As Josh Sapan bows out as CEO, what now for AMC’s niche streaming play?
  • Will streaming numbers finally measure up?

Last week, we asked readers to respond to a poll question about the sale of Reese Witherspoon’s production company. Here are the results of that snap survey:

As you ponder the overwhelming endorsement of Witherspoon’s dealmaking acumen why not participate in this week’s poll topic, one that has been inspired by the can of worms recently opened up by Scarlett Johannsson in her legal battle with Disney:

Purely poll question

Is the back-end deal, where participants are rewarded for box office success, doomed?

Send response to info@purely.capital or to Wayne Marc Godfrey’s LinkedIn profile.
  1. Yes, profit participation will fizzle out as box office star power wanes.
  2. Higher upfront deals and lucrative signing on fees will become the norm instead.
  3. Alternative profit-sharing deals will take over as spinoffs in different media grow in importance.

Chart of the week: In its second quarter video trends report, digital video recording company TiVoreveals that the number of streaming services being used by American consumers has jumped by 27% since the pandemic started to as many as 8.8—grounds for optimism for the dozens of services competing for customers. The report shows that people aged 18-30 are using 11.3 different services, while those 51 and older use about 5 services. But cost is a major factor, which is why advertising-supported services are becoming more desirable. TiVo found that 81% of users believe that having access to free AVOD services is preferable to paying for another streaming subscription. 83% of consumers would like to see paid streaming services offer free, ad-supported tiers.

Source: TiVo Video Trends Report for Q2 2021.

  To continue reading please Sign up here or sign in to your account.