The rampant success of streaming services like Netflix and Hulu made many studying the broadcasting media space believe that the Netflix model was the only one that would be viable in the future. The growing success of Pluto TV proves that that simply is not true.
The Netflix streaming model is something that many streaming services, including Dish Anywhere, have replicated to varying degrees of success. In essence, that streaming model means to offer a library of ad-free content for a set subscription rate. The money consumers pay for their monthly subscription is where the profit (hopefully) comes from.
The Pluto TV model is the opposite. They offer a library of content for free, but that content does include advertisements. Those ads are the revenue model for the company, there is no subscription fee. Many speculated that a model like that would never survive in the Netflix era. As it turns out, Pluto TV is thriving.
Viacom, which is comprised of networks like Comedy Central, MTV, and Nickelodeon, has over 700 million subscribers and operates in over 160 countries, just acquired Pluto TV for a cool $340 million in cash.
Inc. spoke with Ilya Pozin, one of the co-founders of Pluto TV about their recent acquisition. “’I’m stoked for what’s to come,’ he says. ‘The outcome of the exit is huge, but the opportunity to see our company turn into a household name, which is really what’s right in front of us, is even bigger.’”
Viacom can provide a serious amount of fiscal support for Pluto TV, but only time will tell if they can actually get a significant portion of the streaming services pie. For now, it seems as though companies like Amazon, Netflix, Hulu and DISH Network will remain on top. It is inspiring to see companies innovating on, what is now, the traditional Netflix model. Now it’s time to see if consumers agree.