ViacomCBS is teleporting 14 more channels to Hulu’s live television service. But following an early spike after the morning bell, the stock closed red for the day amid a widespread market drop.
ViacomCBS [$VIAC] said the multi-year deal will keep CBS, CBS Sports Network, and The CW, among others, on Disney’s [$DIS] Hulu+ Live TV, while tacking on 14 networks from the pre-merger Viacom, like Nickelodeon, Comedy Central, MTV, and BET.
Hulu + Live TV is a virtual multichannel video programming distributor, or vMVPD, that gives cord-cutters access to live programming, including news and sports. The service, at $64.99 a month, starts to mirror its standard cable competitors with more than 65 live channels. Quibi’s Throwing in the Towel, Specifically to Roku
“Hulu continues to be a great partner, and this agreement ensures that Hulu + Live TV subscribers are now able to enjoy the full breadth of our leading content across news, sports and entertainment for the first time,” Ray Hopkins, president of U.S. networks distribution at ViacomCBS.
ViacomCBS is also remodeling its CBS All Access service into Paramount+. Propped up by ViacomCBS’ content library, the service is set to compete with Netflix [$NFLX], Disney+, and AT&T’s [$T] HBO Max. The merger between Viacom and CBS closed in late 2019. Disney Rolls Out Streaming Plans & They’re Not Playin’
On Monday, KeyBanc Capital Markets analyst Brandon Nispel noted that the deal resembles ViacomCBS’ agreement with Google’s parent Alphabet [$GOOGL] for more of its networks on YouTube TV.
Nispel forecasts it as a positive development, claiming it expands the distribution of Viacom’s content. The Hulu service has about 4.1 million subscribers, compared to YouTube TV’s roughly 3 million. Assuming a $3.78 per monthly subscription for the additional networks, Nispel believes the Hulu deal would add about $186 million in annual revenue in 2021. Roku Welcomes HBO Max
Nispel added that eventually someone will have to pay up for the added content. That someone will likely be consumers. Last summer, Alphabet’s YouTube TV increased its price to $64.99 a month from $49.99 a month, around the time ViacomCBS’ 14 other networks hopped on the service.
ViacomCBS stock fell 1.8% to $36.60 on Monday, while the broader S&P 500 index was down 1.5%.