3 big ways CBS merging with Viacom could help it fight Netflix — and one downside to the deal (CBS, VIAB)

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After 13 years apart, CBS and Viacom have agreed to a reunion that would bring together the companies’ broadcast networks, cable channels, streaming services, and film and TV studios.
The proposed deal could also bolster the combined company’s streaming initiatives, which management highlighted as a big incentive for the deal.
Wall Street analysts and a media strategist previously broke it down for Business Insider.
ViacomCBS, as the company is to be called, wouldn’t have the global footing of Netflix or the brand power of Disney. But it would have more advantages than either CBS or Viacom has on its own today.
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CBS’ marriage with Viacom could give the combined company an edge in streaming video.

After 13 years apart, CBS and sister company, Viacom, have agreed to merge in a deal that would create a new media conglomerate with a combined market value of around $30 billion, with $28 billion in revenue.

Read more: CBS and Viacom have agreed to become ViacomCBS, as part of a deal to reunite the media companies after 13 years

There are corporate reasons to merge the two companies, which are both majority controlled by the Redstone family through National Amusements, Inc.

But the proposed deal could also bolster CBS’ and Viacom’s streaming initiatives, as the companies emphasized on a call with investors following the merger announcement. Wall Street analysts and a media strategist previously broke it down for Business Insider.

A combined CBS-Viacom wouldn’t have the global footing of Netflix or the brand power of Disney. But it would have more advantages than either CBS or Viacom has on its own today. The companies, together, could reach a wider audience, build a broader catalog, and have more negotiating power with the help of Viacom’s Pluto TV.

Where CBS fits into the streaming wars

CBS has largely been overlooked in the streaming wars this past year as legacy media giants Disney, WarnerMedia, and NBCUniversal prepare new streaming services that could pose threats to incumbents Netflix and Amazon.

Yet, CBS — which is still the most-watched network on TV — also has two standalone streaming subscriptions, CBS All Access and Showtime. The two platforms reached a total of 8 million subscribers at the end of last year, and CBS raised its goal to 25 million subscribers domestically by 2022, up from a target of 16 million. That would be a little smaller than Hulu today, across its on-demand and streaming-TV offerings.

CBS also has free, ad-supported streaming sports and news networks, including CBS Sports HQ, CBSN, CBSN Local, and ET Live. Its studios, including CBS TV, produce some programming for other streaming services as well, such as “Dead to Me” on Netflix.

The advantages of a Viacom deal

ViacomCBS, as the company is to be called, could be a more compelling streaming contender.

Viacom’s streaming and production assets would open up CBS to a broader audience. While CBS is known for having the oldest audience in network TV, Viacom’s networks like Comedy Central and MTV, and its children’s channel, Nickelodeon, …read more

Source:: Business Insider – Entertaiment

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