Editorial: Viacom Is Dooming Themselves to Failure in The Age of Cord Cutting




In a day and age of streaming and cord cutting Viacom seems to be determined to set itself up for corporate doom.

Last week Viacom pulled most of its shows from Hulu’s streaming service. This seems to be a part of a larger strategy change at Viacom.

During last weeks earning call Viacom’s CEO Bob Bakish hinted at this development, telling analysts and investors that “SVOD is not going to be a significant part of our affiliate revenue” going forward, and that the company would be “highly selective in striking agreements with over the top distributors” in the future.

This may seem like a smart move in the short term, but in the long term it is likely to mean the downfall of Viacom as we know it. In the day and age of shrinking subscriber base of traditional pay-TV services the only area that have a growing have been SVOD services like Hulu and Netflix. Making this move even more mystifying.

Viacom went on to say it plans to focus on growing traditional pay-TV providers.

“We will also reinforce the pay TV ecosystem by being highly selective in striking agreements with over the top distributors, confining those deals to largely library content. We do want to support the success of virtual MVPDs, as we have with partners like Sling and DIRECTV NOW, and embrace their roles as catalyst for innovation,” said Bakish.

This may explain why recently Viacom was dropped by Sony’s PlayStation Vue. Many pointed fingers at PlayStation Vue but maybe the fingers should have been pointed at Viacom.

In the end this seems to be very short-sighted. It seems as if Viacom is making a play for more live TV subscribers that bring them more profit; however, it is turning its back on a fast-growing market of on-demand TV. It does this whereas others such as Fox, CBS, and Disney are doubling down on deals with services like Hulu.

Only time will tell how this will turn out for Viacom but it feels like the company is jumping back on a burning ship rather than taking its chances on a smaller lifeboat.

Many cable executives are likely watching Viacom with great interest right now. Wondering if their attempt to swim upstream against cord cutting will pay off.

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