In September, Paramount’s Pluto TV became the first free, ad-supported platform to break the Nielsen Gauge, the rating provider’s monthly, cross-platform snapshot of TV usage. The platform reached 1 percent of all TV viewers in the US that month, just below HBO Max and ranking below other paid streaming services. The milestone was a coup for Pluto TV, but not entirely surprising, says Tom Ryan, head of streaming at Paramount, given the platform’s longevity and content offering. “I think this is the beginning of Pluto emerging as one of the top players in US Connected TV engagement,” says Ryan The Hollywood Reporter.
Pluto TV was founded in 2013, a few years ahead of competitors like The Roku Channel and Amazon Freevee. After Pluto TV was acquired by ViacomCBS (renamed Paramount Global) in 2019, it was given preferential access to the CBS library, which was a key differentiator for the platform. Last year, Pluto TV grossed more than $1 billion, just under the annual revenue of Paramount’s paid streaming service, and logged a total of 4.8 billion viewing hours over the year. (During the same period, Fox’s free streaming service Tubi, for comparison, reported 3.6 billion total viewing hours.) The company is on track to reach 100 million to 120 million monthly active users globally by the end of 2024, Ryan says. after hitting 72 million in the third quarter. (Paramount+ reported 46 million subscribers in the third quarter.)
Ryan attributes Pluto TV’s viewership growth to its early start in the FAST (free ad-supported streaming TV) space, which allows the company to better monetize a large user base and invest in more content and its corporate assets. CBS programming is the primary driver of engagement on the platform, with high viewership for NCIS, 60 minutes, CSI channels and for new episodes of primetime shows. Pluto TV plans to triple and expand its on-demand CBS offerings Frasier, cheers and more star trek channels by the end of 2022.
Pluto’s growth has coincided with an overall increase in viewership for ad-supported platforms as content offerings improve and consumers seek lower-cost alternatives to multiple paid streaming services. According to a survey by TiVo, FAST and ad-supported unpaid streaming services accounted for 22 percent of total viewing time by respondents in the US and Canada in Q2 2022, up from 10 percent in Q4 2021.
The ideal programming for FAST TV are large franchises that have high volume of content and self-contained episodes, Ryan says. This allows viewers to tune in at any time and encourages bingeing. Pluto TV has capitalized on this by creating many channels specific to the platform and dedicated to just one show, such as: Tosh.0 Channel. “It offers more binge options compared to other FAST services,” said Kevin Tran, media analyst at Morning Consult. It’s one of the reasons Pluto TV has stayed away from original content, even as competitors like The Roku Channel, which publishes its original film, Strange: The Al Yankovic Story, in November, move further into the room. “I would never say never, but I don’t think the FAST market can support original programs in a very successful way today,” says Ryan. According to Ryan, the cost of producing and marketing original content is too high and the success rate too low. And since the scope of original content is more limited than, say, an older franchise, that doesn’t help with watch times, the focus of a FAST platform.
“I think there are a lot of players out there who use that [streaming video on demand] Originals align with the FAST space because they don’t have the flywheel of third-party content, nor the advantage of first-party content that we have as Pluto TV,” Ryan adds.
Consumers are still not as knowledgeable about FAST offerings as they are about subscription services, and launching an original could help attract new viewers and differentiate the service. However, given its development and scope of content, Pluto TV can monitor competitor results and decide it doesn’t need to take that step, notes Tran.
Inside Paramount, Ryan said he sees Pluto TV as a complement to Paramount+. The two services allow the company to promote and broadcast select Paramount+ content through the free service in hopes of attracting subscribers. When a user leaves the paid service, Ryan hopes to keep them in the company’s streaming landscape by offering the free service. “We’re really focused on making the one plus one of free and paid streaming equal three,” he says.
Ryan’s next step is to expand Pluto TV’s international presence – the platform currently has a presence in more than 30 markets after launching internationally four years ago – as well as its national leadership. While churn in the FAST space remains an issue, offering a free service is likely to bring more consumers in the future, especially when the economy worsens, due to the ease of switching between platforms.
“They capture a huge chunk of consumer time and viewing behavior,” says Michael Goodman, director of digital media strategies at Strategy Analytics, of the market potential for FAST channels, adding, “And given the almost non-existent barrier to entry, I’m the only one who can assume.” anticipate that this will increase in the future.”
A version of this story first appeared in the November 2 issue of The Hollywood Reporter magazine. Click here to login.