December 27, 2019
With ViacomCBS staking much of its over-the-top video future on Pluto TV, the ad-supported video-on-demand platform, Comcast reportedly is considering joining the AVOD market that also includes Tubi TV.
The Wall Street Journal, citing sources, reports the cable giant is in advanced talks to acquire Xumo TV, the Irvine, Calif.-based service offering more than 140 digital channels of programming across 12 genres, including sports, news, kids and family entertainment. Content partnerships include CBSN, People TV, College Humor, and History, as well as the PGA Tour, among others.
The Xumo app is currently available on Roku and embedded in several smart TVs from Samsung, Panasonic and Vizio — the latter based in Irvine as well.
Comcast unit NBC Universal is launching SVOD platform — Peacock — in April, 2020. Acquiring Xumo could help the cabler sustain its pay-TV legacy through an ad-based business model in the rapidly evolving digital ecosystem.
Comcast isn’t commenting on the scuttlebutt, but CFO Michael Cavanagh, speaking Dec. 9 at the UBS 46th Annual Global Media and Communications confab in New York, said the company was entertaining the AVOD market in response to a SVOD landscape dominated by Netflix, Amazon Prime Video, Hulu and Disney+.
“We think we’ve got a pretty special opportunity [with AVOD], when you think about the relatively underserved segment of premium content ad-supported,” Cavanagh said. “Our work shows us that consumer demand is there.”
Indeed, since ViacomCBS acquired Pluto earlier this year for $340 million, the company has made the platform centerpiece to its global digital distribution strategy.
“Our focus on an investment in Pluto is evident,” Bob Bakish, CEO of ViacomCBS, said on the recent fiscal call. “In Q4 alone, Pluto launched 43 new channels and last month, Pluto Latino added 11 new channels given the platform of total 22 channels with over 4,000 hours of Spanish and Portuguese language programming.”
New AVOD roll-outs and improved ad-tech are expected to drive U.S. online video advertising revenue to $27 billion in 2023, according to IHS Markit Technology.
“The AVOD goldrush is here, and it represents a prime opportunity for service providers, new AVOD entrants and content companies,” said senior research analyst Sarah Henschel.