ViacomCBS to launch new streaming service blending CBS All Access with Paramount films, Viacom channels

Key Points
  • ViacomCBS is preparing to throw its hat into the streaming wars after consummating a merger on Dec. 31.
  • Both Viacom and CBS have existing streaming services, including CBS All Access and Showtime, which combined have more than 10 million paying subscribers.
  • The streaming service will build off CBS All Access and include Paramount Pictures movies, which have thus far been leased to other streaming services such as Amazon Prime Video and Netflix.
Bob Bakish, president and chief executive officer of ViacomCBS Inc., center left, and Shari Redstone, chair of VicaomCBS Inc., applaud during the opening bell in celebration of the company's merger at the Nasdaq MarketSite in New York, U.S., on Thursday, December 5, 2019.
Michael Nagle | Bloomberg | Getty Images

First came the merger. Now comes the streaming service.

Newly combined ViacomCBS is working on combining media assets for a new streaming service that will build on CBS All Access, according to people familiar with the matter.

While ViacomCBS executives haven't made any firm decisions, they are considering creating a service with advertisements that will combine CBS All Access with Viacom assets including Pluto TV, Nickelodeon, BET, MTV, Comedy Central and Paramount Pictures, said the people, who asked not to be named because the product discussions are private.

An ad-free version will also be available, and a premium version of the streaming service will include Showtime, the people said. ViacomCBS executives haven't decided on a name for the service, nor a price, though the base service will probably be less than $10 a month, two of the people said.

ViacomCBS CEO Bob Bakish has thus far declined to answer questions about the company's streaming strategy, but ViacomCBS executives will speak about the planned service during the company's fourth quarter earnings conference call on Feb. 20, said the people. ViacomCBS will also reveal statistics about total paid subscribers for its existing streaming services and give revenue figures for the first time, said the people. Chief Digital Officer Marc Debevoise, Pluto TV CEO Tom Ryan and President of U.S. Networks Distribution Ray Hopkins have spearheaded the effort, along with Bakish, two of the people said.

ViacomCBS is in the awkward position of being simultaneously early and late to the streaming wars. CBS launched CBS All Access in October 2014, more than five years before Disney+, Apple TV+ and the coming debuts of NBCUniversal's Peacock and AT&T's HBO Max. But after merging on Dec. 31, the new company has added heft to create a new streaming service that it feels can compete with the largest streaming products.

The new product could be the final significant streaming offering that hits the market as traditional media companies all prepare for a post-cable TV future. ViacomCBS hopes consumers will see the value in the combination of live sports and news with movies, strong kids programming from Nickelodeon and Noggin, and both scripted and unscripted programming, the people said.

A ViacomCBS spokesman declined to comment.

Building on CBS All Access

While CBS's broadcast network is still free over the air with an antenna, CBS All Access has appealed to millions of Americans who have either cut the cord on traditional cable or want the ability to watch TV programs whenever and wherever they are. CBS hasn't broken out the exact number of subscribers for CBS All Access, but has said that the service combined with Showtime has more than 10 million subscribers.

CBS All Access, currently priced at $5.99 with ads and $9.99 without, allows subscribers to watch all of CBS's programming, including live sports such as the National Football League, on any device. Like other streaming services, CBS has also made original programming for the service, including "Star Trek: Picard" and a reboot of "The Twilight Zone."

Viacom's streaming strategy prior to combining with CBS has been to sell a number of small niche products, such as $7.99-per-month Noggin, a preschool-focused service with popular kids shows such as "Dora The Explorer" and "Paw Patrol," and BET+, a $9.99-per-month service that includes original programming from Tyler Perry.

ViacomCBS's plan is to keep these streaming services in existence, said the people, while marketing the new service to current subscribers. Similar to how AT&T's WarnerMedia priced HBO Max at the same price as HBO, ViacomCBS executives imagine many current subscribers will upgrade to the larger umbrella subscription product when they realize how much more programming they'll get for little extra money.

The new service will also be the home for old Paramount Pictures films, which have been previously licensed to existing streaming services such as Netfilx and Amazon Prime Video. There are about 3,600 Paramount movies, including "The Godfather" and the "Star Trek" movies. ViacomCBS will also have exclusive access to another 700 movies through a 49 percent ownership stake in Miramax.

Disclosure: Comcast owns NBCUniversal, which is the parent company of CNBC.

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ViacomCBS president Bob Bakish on Viacom-CBS merger
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