Yahoo Finance Why Viacom Sees Value in Going Direct-to-Consumer Internationally
Are Viacom's Troubled Times Finally Over?
Viacom’s direct-to-consumer offerings
Viacom (VIAB) has revived its Noggin brand by launching it as a mobile streaming subscription service in Latin America. According to a Bloomberg Business report, television viewers in the United States are still subscribing to pay-TV companies such as Comcast (CMCSA). But viewers in international markets are increasingly subscribing to over-the-top offerings from US media companies.
According to the report, which cited data from IHS and Bloomberg Intelligence, cable penetration is lower in international markets than in the United States, which has an 84% penetration of cable or satellite subscriptions. It could be one of the reasons Viacom perceives value in going direct-to-consumer in some international territories.
Viacom Play Plex
Last year, Viacom launched Viacom Play Plex, a TV Everywhere product. The branded apps in this suite will be customized for every country where Play Plex is launched. Play Plex is a mobile apps suite designed for Android (GOOG) and iOS-based (AAPL) devices.
It’s expected that Viacom Play Plex will offer a direct-to-consumer option in the future. It will be similar to Discovery Communications (DISCA) DPlay suite of mobile apps. Play Plex consists of Viacom’s VOD (video on demand) services for all its major channels, including Comedy Central, Nickelodeon, and MTV.
Referring to these direct-to-consumer offerings at a Deutsche Bank (DB) investor conference earlier this month, Viacom stated, “Working with existing distributors to launch new brands and new products and very often including Noggin. Noggin, we are working with our distributors and allowing them to sell it on our behalf. So it creates new offerings without putting a strain on the packages that we were talking about before. It’s very difficult to add networks to existing packages, but you can have complementary revenue-generating opportunities for us and for distributors and, in some cases, direct to consumer.”
Viacom accounts for 0.08% of the SPDR S&P 500 ETF (SPY). If you’re interested in exposure to the computers sector, note that SPY has 3.9% exposure there.
In the next part of this series, we’ll see why Viacom’s acquisition of Channel 5 in the United Kingdom is a “stronghold” for the company.
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