Viacom’s new CEO has chosen to shift its focus on the old TV eco system. On the short run, this policy shift is likely to stabilize the company since cable service providers are better paying customers than new age broadband streaming services.
If you are hooked on seeing your current dose of TV series on Hulu, you have just run out of luck.
Bob Bakish, Viacom’s new CEO, has set in motion a new strategic policy that essentially “reinforce[s] the value of the pay TV ecosystem.”
This means, that Viacom’s new offerings will only be available to paying customers while its older stuff will be redirected to places which could include Hulu, Netflix or Amazon.
The move certainly isn’t surprising since other companies, including 21st Century Fox, also follow the same strategy.
Following this announcement, PlayStation Vue has already dropped Viacom channels from its list of services.
Bakish announced the policy during an earnings call. He resorted to this approach to save a struggling Viacom which heavily relies on older models of pay TV providers, including Cox, Comcast and Dish Network.
His words were to reassure traditional pay TV companies that Viacom will not compete with new age streaming services such as Amazon or Netflix.
This should keep traditional cable companies happy, since they rely on original content and timely shows to draw more customers and keep their exsiting customer base happy.
This strategic policy decision is important for Viacom since it helps its bottom line – cable companies pay more than new age services such as Hulu or SlingTV.
However with consumers increasingly banking on broadband, cutting the cord is set to grow mainstream. Pay TV subscribers will continue to bleed. This naturally means, in the near future, Viacom will have to readjust its policy and offer its shows to cord-cutters as well.