From TV to streaming: Learning from ViacomCBS’s transition
For years now, our viewing preferences have been shifting from linear TV to streaming services. And though legacy cable still exists, there’s no denying the impact brands like Netflix, Hulu, and Amazon Prime Video have had on how we consume media.
In fact, data from 2014 to 2017 shows that the number of series aired on traditional TV increased from 356 to just 370 — a growth of only 3.9% over the span of four years. In contrast, streaming services have recorded an increase from 33 shows to 117 in the same period. As such, big media has had to face a reckoning of how they conduct their businesses.

There is probably no better case study for this than mass media conglomerate ViacomCBS, and the growing pains it has had to undergo to keep up with its competitors.

What went wrong

Earlier in 2020, ViacomCBS Chief Executive Bob Bakish had revealed the company’s plans for the soft launch of a new streaming service using content from CBS All Access. It had also planned to continue licensing shows to its streaming rivals, like WarnerMedia and Netflix, to cash in on what Bakish called “no risk revenue.”

However, the media company’s fence-sitting between two business models — streaming and licensing legacy TV content — did not go over well with investors who were already skittish from ViacomCBS’s poor earnings in the previous year’s fourth quarter. As a result, ViacomCBS’s stock value plummeted by around 16% — a clear rebuke of the company’s wishy-washy pivot to streaming services.

How ViacomCBS recovered

Of course, the shift to streaming services has been a long time coming, but it was fast-tracked by the COVID-19 pandemic. With everyone advised to stay at home, streaming exploded in popularity because it offers an option that programmatic cable can’t: watching whatever you wanted, whenever you wanted. Investors recognized the potential of this market, and ViacomCBS had some readjusting to do to prove their commitment to the shift.

For one, ViacomCBS announced in the latter half of 2020 that it was creating a new division called ViacomCBS Streaming to oversee global streaming services. This, alongside the rebranding of CBS All Access as Paramount Plus, will "ensure a more holistic approach across both free and pay streaming," the company said. This executive reshuffling follows similar strategies from rivals NBCUniversal, Disney, and WarnerMedia, who had earlier announced organizational restructuring plans of their own.

Aside from that, operating costs were inadvertently lessened by the novel coronavirus as normal TV and film production ground to a halt. At the same time, better home livestreaming equipment became more readily accessible in the market. These home streaming kits allowed for near studio-level quality recording and filming at a much cheaper price. Powerful PCBs — circuit boards made from layers of conductive copper and non-conductive insulation — resulted in efficient wiring that can hold and distribute more power, thus making room for more multifunctionality.

This kind of feature-packed equipment proved especially useful during the pandemic, when studio crews can’t move around much due to travel restrictions. Other companies like Netflix have also taken advantage of the same technology to put out remotely produced shows like “Social Distance” while adhering to COVID-19 safety guidelines.

ViacomCBS in 2021

As of writing, ViacomCBS stocks sell at about $45.58 per share — higher than last year's $35.67, which the company hit before it decided to focus on streaming. To keep the momentum going this year, it recently signed an affiliation deal with broadcast group Sinclair, just a few days after inking a different deal with Disney Hulu. Both agreements are expected to boost audience numbers and revenue.

ViacomCBS today is in a much better industry position compared to last year. However, the implications of the new normal on the future of streaming services is still unclear. It remains to be seen how ViacomCBS and its rivals will navigate this changing media landscape.
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