ViacomCBS Streaming Chief Tom Ryan Sees 'Squid Game'-Sized Hit Potential

for the first time. But it's still early days in the streaming wars and just about anything could happen, so we're happy to check in with Tom on this latest episode of Strictly Business, so stick around. Welcome back to the Strictly Business podcast. For my guest today is President and CEO for all Things Streaming at Viacom cb S, Tom Ryan. He first had Tom on this podcast back in and it's gonna be great to catch up because a whole lot has changed for him in over three years.

This conversation was recorded November eighth at the Future of Television Confidence. I wanted to compliment you on a great third quarter. Look really good. You added four point three million subscribers, globally and that currently stands at forty seven million Pluto fifty seven sorry, fifty four million monthly active users. And so I wanted to start with how do these numbers track with your expectations? Um? Are you ahead of

where you thought you would be? Yeah, we're we're exceeding expectations. So we're really happy with the numbers that we released last week across both free and pay and uh, you know we've got a unified streaming group via com CBS right now. UM, so we're really focused on the opportunity to build a unique strategy across both free and paid streaming.

That's that's great. I mean, yes, you guys are are in a number of different businesses on the streaming side, and I was curious first and foremost about in terms of your strategy here. I wanted to start with movies because that's a big part of at least what you're doing on the on the paramount plus side. And it feels like I'm seeing a variety of different strategies for lots of different titles. Clifford, the animated property just came

out day and date. Others you've done sort of the forty five day thing, do you guys have a sense of of what the strategy is or is it you're just trying lots of different things. Yeah, So we think in this era in particular, it makes a lot of sense to be as flexible as possible when it comes to releasing UH movies in streaming and so we're fortunate

um that is part of via com CBS. Not only are we building leading streaming services, but we also have a major movie studio and so that allows us to really leverage everything the Paramount Pictures does for streaming and so UM as we think about the different ways you go to market, as you mentioned, there's a there's actually three different ways in addition to the traditional way. There's exclusive, which we've done with Infinite, which we released earlier this year.

There is day and date, which we've done with UH with paw Patrol with Clifford. And then there's a fast follow to theatrical like forty five days both post the actual, which we did with A Quiet Place too. And we've seen success in all of those models. So you know, with movie goers, you know, it really being a moving target about how you know, how uh confident people are to go to movie theaters. These days, um, you know,

and and it really varies by demographic and by location. UM, we think it's important to maintain flexibility, but we've seen, you know, just great results when we when we've gone day and date. For example, there was concern that there could be cannibalization, but you know, with Paw Patrol, we we vastly exceeded expectations both theatrically as well as our

streaming targets for the movie. So does that mean that there will could there be a point where there will be a one size fits all or you're saying you're comfortable sort of matching the strategy to the particular film's needs. I think for the moment, you know, Paramount Plus is eight months old. We launched in early March. Yes, it's a an evolution to a certain degree of CBS all access,

but it's vastly expanded. It brings all of Viacom, CBS is content and resources to bear and so we absolutely do want to hone our strategy as we move on. But we think that you know, having seen success in each of the different methods that we've released movies in, UM, you know, this flexibility is important to have right now, and we may well find that we're gonna maintain, you know, a flexible model and approach into the future. Got it.

Also something that struck me listening to the third quarter call is kids content in particular is really resonating on your platform. The Nickelodeon library is doing great. You mentioned Paw Patrol, Clifford. We haven't even talked SpongeBob or the new I Cardly, is this actually sort of becoming the identity of paramount plus because you guys obviously marketed a lot of different ways news and sports, but it does

feel like kids is sort of stepping out front. Well, I mean, we just released Paranormal Paranormal Activity next to Kins. So I wouldn't say our identity is that of a kid's service per se, but uh, I would say that, you know, kids is an area where we think that we can be one of the leaders in streaming. It's

a plate we've think it's an underserved category. It's a category that plays to buy a com CBS strengths with Nickelodeon, the robust catalog that we have, UM, the originals and the reboots that we're able to do UM on that catalog, UM, and it really sort of fits nicely into our strategy

of being a whole household service. So what we're looking to do with Paramount Plus is to have a service that really, um you know, has something for everyone in the family, from the dad who loves sports, to the mom who might be into scripted dramas or some of our original movies UM or to the kids who are coming in droves for all that we have to offer from on the kid's side. So it's it's a place

that we've seen lots of early success. We've also got great franchises and kids UM and as anybody with a parent with a with a kid knows, any parent with a kid knows, I should say, um, you know, the last thing you want to do once your kids gravitate toward a streaming service UM is and subscribe from that streaming service. So it really has great benefits in terms

of retention. Got it. Another thing that UH coming up in the fourth quarter big test for new originals from you guys, yellow Stone, South Park, new iterations, new UH spinoffs, or I should say, of these franchises, how important are these shows for Paramount Plus for the for these to work because you don't have the core yellow Stone or south Park on the service, those have been licensed out to rivals, and you know, does that make these all

the more important to work? Well, I should start by saying that the service is working, as you noted at the top of this call, across our paid services where at forty seven million global subscribers already, Paramount plus is the driver of our paid UH subscription growth and again has only just launched eight months ago. So we're very very early innings UM with Paramount plus UM, and I

think streaming is just early innings to begin with. UM. It's true that some of our products have been licensed out UM Viacom CBS has long been in the licensing business UM, and many of the decisions that were made in order in terms of licensing content UM elsewhere we're

made well before we launched Paramount plus UM. But as our business is evolving and streaming is a top priority of the company, our approach to licensing is evolving as well, and so we're you know, still in the licensing business of course, but increasingly we are holding our i P for our own streaming services UM, and we're leveraging UM that i PU not just catalog, but also investing in you know, reboots and spinoffs and other new original content

based on those franchises. So, um, we think it's uh, it's a it's a great and evolving strategy and um, we've got you know, it's it's you know, the the amount of I P and franchises that we have across the combined by A come CBS is so massive. I think we've got a huge opportunity here and we're already seeing the fruit, uh, the fruit of that work being coming very important to the services results thus far. Do you feel though that Viacom CBS has sort of a

defining hit at this point? And and could these new versions of Yellowstone or South Park b that I mean, I've seen some of the work that's not yet been released shirt I mean Taylor Sheridan, Um, you know, we're creating a universe on Paramount Plus around all of this new content that he's creating from Mayor of Kingstown which release releases very soon um to hye eight three and beyond. So yes, I think that we're going to have you know, lots of fantastic new shows that are created not just

by him but by many others. And uh, you know, we're investing significantly in content. So you're going to see a lot coming to Paramount Plus in the months ahead and to date, as you said out here eight months now, I've mentioned the success you've had with some kids content. Are we overlooking anything in terms of what you see as as the real success stories for Paramount Plus? Uh in these first eight months, well, I mean we have not been uh shy about saying how successful sports has been.

Um So, we have seen you know, record uh consumption of of UH of NFL games recently. We've also had lots of success with European football or soccer. Um So, sports has been a great area of success for US. Um Our movies have performed extremely well. Our originals in terms of scripted dramas and other shows as have also done well. So um you know, kids is just one

part of the story, got it? You know? Just the whole notion of a hit in the streaming game these days has been redefined I think by Netflix with what it achieved with Squid Games. And I was curious, do you think Viacom CBS can achieve that kind of international hit with the increased emphasis you're starting to put on locally produced content in Latin America or elsewhere. Absolutely so.

Bicom CBS is one of the biggest creators of content globally, UH, not just creators of content here in America that we export, but creators of content UM in many different parts of the world. UM. And at the same time, we also have a global streaming strategy. Streaming is a global mega trend. We're rolling out our streaming services around the world. We're already in twenty five countries for Paramount Plus and growing, and we're already in twenty six countries for Pluto tv UM.

We did a couple of M and A transactions very recently where we acquired significant portions of additional broadcasters in South America, making us one of we already were, but that just reinforced us as one of the biggest creators of Spanish language content, which, as you know, UM travels really well around the world and has been responsible for

some of the biggest hits in UH in streaming. So we think that we are incredibly well positioned both from a distribution perspective as we continue to scale up these streaming services across free and pay around the world, but also you know, from a content creation perspective, UM on a on a not just on a U S, but on a local basis where we can export to all the different countries that are streaming services are present um in order to you know, really have the type of

global scale and success that you need to be a global streamer today. Yeah, I mean, because that really is the name of the game, isn't it. And when you guys have had some impressive growth, but right now as it stands, in the streaming game, there are some bigger, much bigger I should say, global services, and you guys are certainly pledging to spend a lot of on content. I think that the figure on the latest call was five billion by the end of which is a huge

number for Viacom CBS. It shows how serious you guys are, and yet it pales in comparison to what some of the other spending estimates are like. And so the simple question is is this truly enough to compete and sort of crack that first tier of streaming services. I mean, we think that we are very well positioned. I mean, not only are we going to be committing or we're already committing, and we will continue to increase the commitment of billions of dollars of content. But we've got a

massive library across book via Com and CBS now combined. UM, all of that together we think positions us for great success and streaming. Well, I think something else that will help was this deal you guys just announced with T Mobile. Uh. It seems like there's a number of deals that you guys have in place with Amazon channels, with Sky all

that should help paramount plus scale. But I do wonder when you strike these kind of deals, is there were a risk of too much trade off in terms of the data and the revenue that you lose to the partners, you know, in exchange for scale on these deals. UM. Well, I mean, you know, we think that broad and ubiquitous distribution really leads to scale. So the strategy really is to manage this diversified portfolio of distributors UM, and in

doing that we maximize and optimize growth. UM. So it's true that a service UM in certain cases has less visibility into channels user than a D two C user, but there's advantages. One UM is that our portfolio strategies yielded a very large directed consumer base, and we've got excellent visibility on those users today. UM and too. It's important to extend the service to users wherever they are,

and we're growing paramount plus faster as a result of that. UM. You know, we're also UM you know, one of the or i'd say we're the biggest partner in the channels space as others are abandoning UM. That is a distribution method UM. As for revenue, I think it's critical that Paramount Plus is fully distributed and aligning our incentives with distribution partners means that those and partners, those distribution partners

invest in our growth. And that's exactly how we were able to scale Pluto to TV so quickly we launched that seven years ago. It's going to be a billion dollar business this year in just seven years after launch, largely through shared success and aligned interest with distribution partners which were also bringing to Paramount plus UM. And as for T Mobile, it is massive promotion UM, but it's not that's not limited to just certain tiers. That's available

to any T Mobile or Sprint postpaid customer UM. And it's actually driving direct to consumer users. So there's really no data tradeoff for us there. But with with Amazon, it sounds like you see there's some value to the fact that a lot of the other rivals of yours are are stepping out of that space for their own reasons. But it sounds like you think there's actually some strength

in in staying on there and facing less competition. We do. Yeah, we think they've been a great partner and they've helped us um scale and again where there's aligned incentives and a and a shared approach to growing the business, to whether we think that they can be an important part of our continued growth. We'll be back in just a minute with more from Tom Ryan of Viacom CBS. We're back talking with Tom Ryan, who oversees streaming services like

Paramount Plus and Pluto TV for Viacom CBS. I referenced earlier this notion of you know, tears in terms of the amount of competition you've got out there. I'm curious though there's been it feels like there's new data every month about the consumer appetite for subscription streaming services. What is your take on that now? And do you feel that Viacom CBS has sort of earned a spot among you know, a limited number of players. Yeah, so, I

mean it's funny. I mean, well, first of all, you know, streaming is still in its infancy in my opinion, UM. And that's across both free and pay. But you know, when you're talking about UM paid, it's it's funny because as an entrepreneur when Pluto was independent, UM, one of the things that I would say when I would come on your podcast or speak at other conferences was that, you know, people would be interested in free streaming services because they're only going to subscribe to one or two

paid services. And at the time, this was just three four short years ago, that was true. UM. I was wrong though. I mean, people are now subscribing to four or five paid services, and that could go significantly northward from here. And the reason is that people are finding great value and paid streaming services as more and more high quality paid streaming services come to market um at

affordable pricing, which paramount plus has in spades, UM. And as people are increasingly just streaming and connecting their tea these to the Internet. I don't know if you can buy a TV that doesn't have a smart operating system and uh, you know sort of prompts you to connect to the internet. UM. And so there are you know, massive winds at the back of streamers. I'm not going to say that like every streaming service is going to

be successful. I think what unites what we do via com CBS both across Free and Pay with Pluto and Paramount Plus is that these are broad based services that are for the whole household and have all the benefits of scale that come with that, UM as well as the retention benefits of being services that get used by multiple people in the household. UM. So you know, we're the space is evolving very quickly. UM. People are paying for more streaming services. They're also using you know, freed serve.

It has an impact the what I said back years ago either about free free as in hyper growth to people are just streaming a lot more and the like this rising tide is gonna list lift um boats. It's not kind of lift all the boats, but the best boats will rise significantly as a result. And we've got the best boat and free and we're building the best boat or one of the best boats, I should say,

and pay. And what's interesting about your strategy is you kind of bolt the boats together, like you know, Pluto serves Paramount Plus. There's some integration there. Describe what the

strategy is there and why it's the way to go. Yeah. So, I mean the strategy behind creating a unified streaming group was so that we could actually take this unique strategy across free and pay um and bring it to market, but with a unified team that's building our streaming platforms together, rather than building them as you know fifetoms UM with different teams and different goals UM and with the intent of making the one plus one of free and pay

equal free UM. So you know what we've been doing, and again this is very early days. This streaming group was created a year ago when I was pointed to my new role, and we've built a unified streaming executive team and we've got of course there's folks who were focused, you know, just on one service versus another, but increasingly we have our entire streaming group focused on the opportunity

to grow the overall business as much as possible. And you know, interlinking this ecosystem where we can move users from one service to the next, we think is really

important and we've already seen some great early success. Example would be UM the channels that we put for Paramount plus UH and for Showtime, O T t Onto Pluto TV, where we'll put premium content in front of the paywall as a linear channel on Pluto t V. UM and those uh, those channels on Pluto TV have driven more starts for subscriptions or more trials UM for our paid services than when we put the same content for free in front of front of a paywall, of course, on YouTube,

which has billions of users. So it's showing you how effective this um already is in its infancy. And we've got a very significant roadmap of other things that we want to do to bring these services together and make them again make the one plus one equal three. And I follow your logic, but I also wonder if there's just some simplicity in, for instance, one brand to market instead of paramount plus showtime. Pluto and Viacon still is other things, UM, So what what do you make of

the simplicity argument. I think the simplicity argument UM makes sense on the surface, but when you dive deeper, you see that there's great reasons to actually maintain different services. So let's take free and pay to start. Pluto is a free streaming TV service. It is instant, there's no friction you turn. I mean when we actually launched Pluto, we didn't even ask for a sign up because we wanted you to be able to sort of experience that magic of turning on the TV through your web browser. UM,

and then ultimately the service largely became a connected TV business. UM. But you know, having that simplicity of just letting people engage with Pluto and having it be as frictionless and as built in as possible UM is a huge advantage and one of the reasons why Pluto is the leader in its category. On the paid side, UM. You know, we think that you know, let's just take paramount plus a showtime for example. I mean, those services appealed to

UM largely different users. There's very little overlap in the subscriber base, although there is some UM and so you know the but but you know, as we think about it from a business perspective, we want to make sure that we're addressing the largest possible audio. It's with paramount Plus. We offer that everything that paramounts plus offers. The content is not tiered in any way, UH, with some very

very small exceptions. UM for four dollars and ninety nine cents so for you know, and that's for with ads. So that's a very very attractive price point. UM. If Showtime we're bundled in there, it would not be made available at that price. So we want and and as I mentioned, like the overlap between the two services is not UM, it is not very large. So UM we want people to be able to get Paramount plus for four ninety nine UM and if they want Showtime, yes,

they can add it on. And we're doing everything that we can to make it as easy as possible for people to UM buy the two services if they're interested, and we're doing that through bundling and other initiatives. UM. But you know, to to address the largest possible audience, we think it's important to maintain them as they are today. Yeah, Judo clearly is a growth story. You put that brand on the map. It's why Viacom CBS bought it. Clearly

the market leader. However, when you look at the third quarter numbers, it does seem that the growth is slowing. The two point one million adds was the lowest you've added since the first quarter of It was below Wall Street projections. What is going on there? UM, It does seem like there's a lot of competition in the space now and I guess that's sort of the downside of of successes. You get a lot of imitators. Uh sure, So, I mean, as you mentioned, Pluto TV is the leader

in its category by a long margin. Um. If if anything, we're extending our lead. UM. So m a use are an important metric. They don't tell the whole story. Um. So we had two and a half million I think m a use quarterly growth um. But where the leader in m a use, were the leader in total viewing hours, and we're the leader in revenue um. And you know, Pluto TV has grown in three years. So the company was acquired at the end of eighteen. Beginning of nineteen eighteen,

we did seventy million in revenue. This year, we're going to do over a billion. Uh you know, it's it's it's it's accelerating. Uh. You know, it's lead in the category. And the growth is you know, extremely significant. So m AU is important. Total viewing hours or engagement and revenue also extremely important. And you know you're seeing massive growth there. It's clearly growing like a weed. I'm guess I'm curious

about the next phase of growth. And sometimes uh, you know, companies that sort of grow too fast, too quickly run into problems. UM. How are you ensuring that that Pluto doesn't do that? UM? Well, I mean listen, you know, we look at Pluto TV as a flywheel where you know, more and better content UM distributed through a simple frictionless product U ubiquitously distributed on all devices, and monetize well. UM creates this fly will where you invest more and

more in it. You know, you invest more in content, more distribution, you monetize better and it just becomes a snowball that allows you to invest in and really provides a competitive mode in some ways to the leader in the category. And so yes, there's more competition today in a space that we helped a pioneer and popularize. UM. But you know, the the Pluto growth and everything that we deliver because we're a shared success model for our

content partners and our distribution partners. UM. You know, speak to any of them and you will see that you know, Pluto continues to you know, grow at a rate that you know pleases them all uh significantly and has them you know, partnering with us more more and more closely. And so UM, you know, I don't know that there's

necessarily you know, an issue from that growth. I'd say that's our job is to to grow not just for the benefit of Viacom, CBS and our users, but also for our partners on the content distribution and advertising side, UM, to deliver, you know, against their objectives. On the programming front, I see more and more talk about some of your competitors stepping up their original programming game. What are you

guys doing on this front? I wonder whether we're going to see sort of the gap between a Paramount plus and A and a Pluto start to narrow as the

expectations grow. You're talking specifically on Pluto for Yeah, so listen, we've done a few things, uh there that you know, we we We've had some content that we've acquired that has not been released elsewhere, UM, such as Bajillion Dollar Properties, a comedy show that we put on which I guess technically could be considered a Pluto original in its last season, UM, which is the one that had been on Seat and

we got the catalog as well. UM. And then we've released other content that hadn't been released elsewhere, UM, including you know, a documentary that got us our first Emmy recently, which is seventy six days, which created by by MTV Studios. UM. So there are cases of original content, but you know, for Pluto TV, by and large, we think about our channels as our originals. UM. People come to Pluto in

order to have an effortless curated entertainment experience. When they don't feel like making decisions about what they want to watch at the precise moment that there to be entertained, they just want to throw on a channel that speaks to them. Uh. And a lot of our channels are descriptive in nature UM, so you know exactly what to expect when you go into that channel. UM. And they just want to lean back and be entertained for hours and so UM investing in making sure that those channels

are well branded, have the best possible content. Increasingly have exclusive content both from third parties that we licensed from as well as from Viacom CBS. A lot of the content UH vast majority. I would say, if the content we get on Pluto from Viacom CBS UM is not available elsewhere in the faster a BOD category. So these channels are almost like our originals, UM, and we invest in them more and more UM with each month as that fly wheel spins faster and we're able to monetize

better for our content partners. UM. I'm not saying that we wouldn't have a more aggressive strategy and originals over time, but the business this is growing so fast and you know, the global opportunity is so large that UM, you know, unlike a paid service that really stands out with UM its originals. You know, Pluto TV UH stands out with you know, its channel offering and its distribution. Let approach

to scaling and globally. How far have you gotten in terms of getting Pluto outside the US and what are the next places you'll be? Yeah, so right now we're in uh, the US, South America, and Europe. So we're in twenty six countries. We launched France earlier this year. We just launched Italy uh very recently a couple of weeks ago. UM, and we've got more and more countries

on the on the horizon. So you know, we when we started Pluto, our our mantra was you know, entertaining the planet, and we on it to be the global leader of free ad supported streaming TV. And we're well on our way at this point. So UM, time for for one last question, UM, in terms of you know, you came into this company working on Pluto and Pluto alone, and you've really sort of expanded your responsibilities. What has

that been like? I mean, I would imagine operationally, maybe it's even night and day going back to your startup days. How have you sort of risen to that challenge? Yeah, I mean listen, I I am flexing muscle muscles. I've never flexed before. I have always been a startup guy working in small, scrappy companies, and so uh, you know, I have patient colleagues who are helping me, you know,

learn to navigate a much bigger organization. But you know, fundamentally, UM, what gets me excited is building UM and I also love good underdog opportunities. When we launched Pluto TV, you know, it's uh, you know, we want we launched something that seemed crazy at the time to most people, which is, you know, a service that was free, uh you know and add supported at a time when everyone thought it was gonna the world was going to subscriptions and ads

were not going to be watched anymore. UM. And just as crazy, it was you know, linear or linear lead UM at a time when the whole world thought everything was going on demand. UM, but we thought that there was some white space to be carved in, an opportunity

to create a big business UM. And fast forward seven years and we've we've we've done that, and I think with paramount Plus, with all the resources that by com CBS brings to bear UM and our unified strategy across free and pay um to help us further accelerate our

paid ambitions with Paramount plus. You know again, we you know, we we we you know, maybe considered an underdog here and again I like that challenge, but I think we've got a huge comtunity to build one of the biggest paid streaming services as well, and then an aggregate across free and pay. I think I think we can be one of the biggest streaming companies in the world together. So for me, it's an exciting challenge to build in

a different setting. UM and uh, we're just getting started. Well, congratulations on a good quarter, wishing you luck for two and beyond. Thanks for taking some time out. Thank you Andy. This has been another episode of Strictly Business. Tune in next week for another helping of scintillating conversation with media movers and shakers, and please make sure you subscribe to the podcast to hear future episodes. Also leave a review in Apple Podcasts Let us know how we're doing.