ViacomCBS’ advertising business fell 27% to $1.9 billion in the second quarter, as marketers pulled back during the coronavirus pandemic and golf programming was postponed.
“We believe Q2 was the bottom [for advertising],” President and CEO Bob Bakish said. After bottoming in April, each month in the quarter showed sequential improvement. The scatter market held strong, as did advertiser categories like pharma, insurance and finance.
Plus, Pluto TV also returned to pre-pandemic growth rates and pricing in Q2, Bakish added.
Even as advertising fell, the pandemic offered a silver lining for ViacomCBS: an uptick in streaming consumption and subscribers.
Revenue from subscriptions and digital video ads increased 25% year over year to $489 million during the quarter. Earlier this week, ViacomCBS announced a unified buying platform for its streaming content, EyeQ, that will roll out this fall.
Pluto TV grew its domestic monthly active users 61% year over year to 26.5 million. By the end of the year, Pluto TV is aiming for 30 million monthly active users.
To fuel further growth, ViacomCBS is populating the platform with its content, from South Park, CSI and JAG to a channel dedicated to Star Trek episodes. It’s also striking deals that will put Pluto TV on 80 million more devices, including TV manufacturers like LG.
The paid platforms of CBS All Access and Showtime OTT also showed strong growth. Showtime OTT delivered its best quarter ever in terms of sign-ups, streams and minutes watched.
Domestic subscription revenue rose 52% year over year. Across CBS All Access and Showtime, streaming subscribers totaled 16.2 million, up 74% year over year and reaching the year-end goal six months ahead of schedule. ViacomCBS now expects 18 million paid subscribers by year end.
In contrast to the other networks’ newly launched services, CBS All Access is a six-year-old product. So it’s undergoing a transformation. CBS All Access now includes content from its other channels, like Nickelodeon, BET and Comedy Central, and will include live sports. And starting next year, it will include exclusive originals, similar to the model other streaming platforms have adopted.
While the acquisition of AVOD platform Pluto TV puzzled some investors last year, Bakish said, the value of Pluto TV is now incredibly clear. It’s the number-one AVOD service, it brings in advertising demand from programmatic channels and direct relationships from ViacomCBS, and it’s becoming a global service, Bakish said. “[We] see tremendous runway for growth in free and paid streaming.”