CBS, Viacom to reunite as media giants bulk up for streaming

NEW YORK (AP) — The newly combined ViacomCBS will invest in more movies and TV shows and try to sell more advertising as it seeks to become a bigger player in the growing business of streaming video.

Yet the bigger company still might not be big enough to be competitive, as larger rival Disney launches its own service in November and streaming pioneer Netflix spends even more on original shows and movies.

That isn’t stopping Viacom CEO Bob Bakish, who will lead the combined company, to declare that ViacomCBS will be “one of only a few companies with the breadth and depth of content and reach to shape the future of our industry.”

CBS and Viacom, which separated in 2006, announced their long-anticipated reunion Tuesday.

Viacom owns the Paramount Pictures movie studio and pay TV channels such as Comedy Central, MTV and BET, while CBS has a broadcast network, television stations, Showtime and a stake in The CW over-the-air network.

CBS was one of the first media companies to launch its own streaming service, CBS All Access. The $6-a-month service now has a new “Star Trek” series, a revival of “The Twilight Zone” and archives of old and current broadcast shows.

Now, Disney, Comcast’s NBCUniversal and AT&T’s WarnerMedia are jumping in with their own services as well to challenge Netflix, Amazon, Google and other tech companies encroaching into entertainment. To expand its library, Disney bought Fox’s entertainment businesses for $71 billion in March, while DirecTV owner AT&T bought Time Warner last year for $81 billion.

To make ViacomCBS’ streaming services more attractive, Showtime could absorb Paramount’s movie library, for instance, while CBS All Access could get a boost from Viacom’s Nickelodeon video, MoffettNathanson analyst Michael Nathanson said.

Once the deal is completed, expected by the end of the year, ViacomCBS will have a combined library with more than 140,000 TV episodes and 3,600 film titles, including franchises such as “Star Trek” and “Mission: Impossible.”

The two companies have been major content spenders, having spent more than $13 billion combined in the past year, or close to the estimated $15 billion Netflix is expected to spend on content in 2019. The two companies have more than 750 series currently ordered or in production.

But the combined company will still be small. CBS has a market value of $18 billion and Viacom about $11.7 billion. Disney’s is nearly $245 billion and Netflix is at $136 billion.

CBS says All Access and its Showtime streaming services have 8 million subscribers combined. That’s far less than the 60 million U.S. subscribers that Netflix has, though it’s comparable with the estimated number of subscribers to HBO Now, that network’s stand-alone streaming service.

And the Paramount movie studio, despite hits like last year’s “A Quiet Place” and the latest “Mission: Impossible” sequel, has just 5% of this year’s market share at the box office. It hasn’t been in the top five since 2011.

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