CBS : Filing of certain prospectuses and communications in connection with business combination transactions

SEPTEMBER 17, 2019 / 4:25PM, CBS - CBS Corp and Viacom Inc at Goldman Sachs Communacopia Conference

Why do you prefer this approach of a more of a hybrid model or a more targeted niche model versus what Netflix has been pursuing?

Robert Marc Bakish- Viacom Inc. - President, CEO & Director

Sure. So what you have in ViacomCBS, in the streaming space is, the bringing together of 2 streaming growth strategies that are both producing growth. On the Viacom side, that is a Pluto-driven, ad-supportedfree strategy, which again is relatively early. When we acquired the company in January, it had 12 million monthly actives. As of the end of August, which was, we referenced for our last earnings call, we had 18 million monthly actives. So 50% growth in 6 months and the growth on a per monthly active consumption basis is higher than that.

So - and by the way, it has plenty of track ahead. We continue to add content. By the way, we added the NFL as a channel. We continue to add new markets, whether that's U.S. Hispanic, which we launched in July 1 of this year or international, we're now in the U.K., Germany, Austria, Switzerland, we launched all of Latin America early in calendar 2020. We believe that has long track ahead of it. Simultaneously and independently, CBS pursued a pay strategy, SVOD. CBS All Access, Showtime All Access. They now have over 8 million combined subs, on track to be at 25 million by 2022. So those strategies were both working independently and importantly, we both have experience executing.

Now you bring them together. And you have what I've started to call this ecosystem, where you can bring people in, in free. And by the way, some people will only stay in free, that's fine. We can monetize them there. Others, we have an opportunity to upsell to pay product, whether that's a CBS All Access product, a Showtime Noggin product, the BET plus, we're launching BET Plus on Thursday or some combination of that.

Should those consumers decide to take a pause on their subscription, which is very common in SVOD, we can retain them in the free ecosystem, continue to monetize them through ad sales and be positioned to remarket to them when their situation changes or new content comes available, et cetera. So we think that is a powerful idea. Again, we've been operating that independently and we look forward to bringing that together.

The other thing I'd say - and so that's 1 point of differentiation. The second point of differentiation comes to content. Sure, we're going to have entertainment content. We're going to have scripted content. We're going to have unscripted content, where we are a market leader particularly on the Viacom side. Add to that, we're going to have news, we're going to have sports. That's all national content. We're also going to have local content and we're going to have international content and it's going to be across all demographics, whether it's 2 to 11s, 18 to 34s, 49s, 25, 54s, African-American, Hispanic, et cetera.

So we think there are many points of differentiation. And the last one is, we don't see this as only a D2C business. We believe there's tremendous power in working with distribution partners. Even today, what people call D2C often has partners involved in it and so this partnership approach, which we're already engaged in, things like working on our ad-supportedfree product Pluto, with a distributor like Comcast and Cox, both are - who are distributing it not only to broadband-only, but through video bundles, we see that as another point of differentiation. So we're tremendously excited about the opportunity that this combined company has in the streaming space.

Andrew M. Borst- Goldman Sachs Group Inc., Research Division - VP

And when you're thinking about the SVOD versus AVOD opportunities, what type of criteria are you using to determine where the content fits best?

Robert Marc Bakish- Viacom Inc. - President, CEO & Director

Well again, this is something that in the Viacom side, we've been looking at - we have 165 content suppliers on Pluto today, which is our ad-supportedfree product. Of that, 2 of those content suppliers are Viacom and CBS. CBS on a pre-dealbasis. They distribute, for example, CBS News. So we have a team that looks at that and says what is the opportunity in the free space and how do we develop a very compelling offering?