Monday, May 20, 2024

10 Years Of Pluto TV And How The Underdog Became An Industry Leader

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Amy Kuessner, EVP Programming, Pluto TV attends 10 Years of Pluto TV at the Dolby Terrace at the … [+] Academy Museum of Motion Pictures in Los Angeles, California.

Getty Images for Paramount+
Launching a product on April 1 is a gamble. Still, in the ten years since that happened, Pluto TV has gone from a potential punchline to an industry leader, proving it is not a joke and should be taken seriously.

So, how different is the platform now from when it started?

“It is night and day different,” explained Amy Kuessner, Pluto TV’s Executive Vice President of Programming for the free ad-supported streaming service. “I came in about a year after launch, and the concept of shifting linear TV to the internet was radical. The marketplace was going SVOD, VOD, paid with no ads, and here we were with a value proposition coming out in the market, with ads, free and linear, so it was a tough market to break through.”

“When we started, we were using the YouTube API. We knew there was a ton of great content out in the marketplace, but you had to package it and make it simple and easy for users to experience. Then we started talking to all the MCNs in the marketplace so that we could start monetizing the content, and we were creating thematic channels much like we do today.”

At the time, Pluto was all short-form content primarily distributed across mobile and web.

“As time progressed, we realized that monetizing short-form content was challenging, and with short-form content, you have too many breaks where users can just drop off,” Kuessner continued. “Because of that, viewers weren’t staying on the platform long. That evolved into us realizing that we needed more long-form content, which was going to create more of a traditional television living room experience, and to do that, we needed to shift from web and mobile to TV, which is primarily where our viewing is today. We needed to get that premium content in-house and create channels appealing to our user base.”

“When I look at where we were 10 years ago, with less than 20 short-form channels, to where we are today, over 400 long-form premium content channels with suppliers from all the major studios, big distributors, big sports leagues, you name it, it’s a world of difference.” They also started with “two or three” curators and now have over 50.

Kuessner rightfully refers to Pluto TV as a “pioneer.” That is not just a PR buzzword she drops; the facts and figures are there.

“We literally created the acronym FAST which stands for free ad-supported streaming television. It didn’t exist ten years ago, it didn’t exist five years ago, and it’s a new rights class, to be honest. We were the first to capture the Nielsen gauge, the one percent of viewing across broadcast streaming and cable viewing, and were the first among our competitors to win two Emmys,” the EVP explained. “We were the first company that brought NFL, Major League Soccer, Major League Baseball, BBC and CNN into this space. It took years of pitching and trying to get them on board. But we were the company that brought them into this space. We were also the first to be acquired and hit $1 billion in revenue in seven years. It’s been a pretty significant change and ten years is not that long. Broadcast TV has been around for over 100 years, and cable has been around for 50 years. We are just scratching the surface of what this business could be. ”

The Paramount Global Pluto TV free ad-supported streaming television service logo is displayed on … [+] the Sphere arena in Las Vegas, Nevada in February 2024.

AFP via Getty Images

In January 2019, Pluto TV was acquired by Viacom for $340 million in cash, a landmark deal for the streamer. In 2020, there was the pandemic, which meant a potential whole new audience, in the habit of paying for their streaming content, was waiting. As of April 2023, Pluto TV had 80 million monthly active users.

“People were staying home, and a lot of businesses during that period were declining but, and I hate to say it because you don’t want to take advantage of such an awful situation, but the pandemic helped Pluto TV,” Kuessner admitted. “We made it free, easy, and accessible. TV shouldn’t be difficult. We want, and still want, consumers to know that they can have a laid-back, linear experience. Turning the TV on and being programmed to, not having to think about all these different options you can possibly get on VOD, appealed.”

What about the perception that, because it is free, Pluto TV is a lesser product than a premium streamer you have to pay a monthly or annual subscription to access?

“With the acquisition, the access to the content that we’ve been able to get from Paramount has just been a pivotal moment for us. We have hundreds and hundreds of TV series, everything from NCIS to CSI to Love and Hip Hop to Basketball Wives and thousands of top-quality movies like The Godfather and the Indiana Jones franchise,” the executive enthused.

“Paramount brings a healthy chunk of premium content to our platform, but we are also a third-party platform, and we will always be that, so we’re getting healthy amounts of content from our third-party providers as well. Because of our size, scope, scale, and how we curate our channels, they often bring content to us first, before it even goes to our competitors, to see how we can work together on a unique window or an exclusive event. It has been really powerful.”

It’s that curation that has really come into play, living up to Pluto’s 2023 branding campaign, ‘Programmed By Humans and TV The Way It Should Be. ‘

“Content and programming is my group so I’d be remiss if I didn’t talk about how programming is our superpower. Nobody in the industry does it quite like Pluto,” Kuessner enthused. “Our human curators are truly what makes us special. What does curation mean? We like to say it’s the perfect marriage of art and science, and art in a way that allows each curator to be creative and add their personal touch and expertise to the channel. Many of our curators are fans of the genres they curate, and the science is that we’re using real-time data. The beauty of the digital world is that you get instantaneous feedback, and you can make changes on demand. Still, we’re looking at our data daily, weekly, and monthly to ensure that we’re programming the best experience for our users.”

For Pluto TV, curation isn’t just a model or an idea; it has attributable names and faces.

“Anime, albeit a smaller category in the well over 20 that we have on our platform, drives huge engagement from our users. So, one of our curators called Nikki is a self-named otaku, which means someone who’s a very rabid fan of anime, created an entire presentation on why we need to go after additional anime categories and channels because of this huge engagement,” Kuessner revealed. “Who would have thought? I never knew that there are six different anime subgenres.”

“This is all stuff that I’m learning, too. There’s sci-fi anime, like Ghost in the Shell; classic anime like Cowboy Bebop; a dark, more thriller kind of anime like Death Note; and then there’s something called Shojo, which is a magical romance anime, including a series called Cardcaptor Sakura. In just one genre, that’s a perfect example of how we use the best of art and science to develop our platform.”

However, while the personal touch is invaluable, and programming to pop culture trends and events, the data remains a critical factor in deciding what shows come and go and when.

“We have franchised channels, like a CSI or Dr. Phil. We used to start with a baseline of the 100 hours we needed for a channel. Now, that baseline is about 300 hours,” she explained. “The content rotation on that channel just depends on the overall success and viewership with that channel. If you have a very high-impact channel and a lot of viewership, you’ll burn through that content pretty quickly. We will see that right away because of the channel’s performance, whether it’s minutes per user, frequency of people coming back, or just total engagement, and you will see that decline over time. That is a key data point for us whether we need a refresh or add more content and bring new series in.”

One area where Pluto TV has acquired a unique positioning in the streaming market is its synergy with Paramount Global stablemate Paramount+.

“A lot of people ask me about how we cross-pollinate. We’re one of the only services with a free and paid ecosystem, and we work together to cross-market both platforms. A couple of examples would be that if they have a brand new original coming out, such as last month’s A Gentleman in Moscow, we will debut season one episode one on Pluto TV over a couple of days on a certain channel, and then we’ll kick it over to Paramount+,” Kuessner said. “If it’s an existing original like Evil, which has season four coming out in May, we will debut the entirety of season three on Pluto TV. Even beyond the sampling, we also get carve-outs from our linear networks. For example, for one of the biggest TV series of all time, Yellowstone, we get a carve-out from the Paramount network to Pluto TV, and that’s not even on Paramount+. Still, we have seasons one through four, a couple of times a year that we start, and that is a compelling hook to get audiences in the door.”

Ten years in, something else Kuessner gives credit to as an incentive for content partners to work with them rather than their competitors is how they split the revenue. For many years, Pluto TV has primarily operated a 50/50 model, but will that continue for the former underdog start-up, which is now an industry leader and part of a larger company?

“It’s something that provides a healthy margin, and it was a great advantage when we launched the business because having a pure revenue share business was one of the reasons we succeeded,” she reflected. “We have a blend of business models today, but most deals are probably 50/50. As the space develops into an increasingly competitive space, it might not make sense for Pluto to do those types of deals in the marketplace where all our competition gets the same content. It’s an ongoing thing, as you might suspect, but we feel like due to our size, scope, and scale, these existing relationships that we’ve had, and being the pioneers, that that we will succeed.”

(Left to right) Matt McMahon, SVP Global Streaming Strategy & Operations, Paramount+ & Pluto TV, Amy … [+] Kuessner, EVP Programming, Pluto TV, Elizabeth Wright, EVP & CFO DTC Segment, Paramount, Tom Ryan, CEO, Paramount Streaming and Co-Founder & CEO, Pluto TV, Vibol Hou, Chief Production & Technology Officer, Pluto TV, Erin Calhoun, EVP, Head of Communications, Paramount Streaming & Showtime and Cross-Company Publicity, Jeff Grossman, EVP Programming, Paramount+ and Domenic DiMeglio, EVP and CMO, Paramount Streaming attend 10 Years of Pluto TV at the Dolby Terrace at the Academy Museum of Motion Pictures in Los Angeles, California.

Getty Images for Paramount+
With a decade in the books, Pluto TV’s international footprint now extends across four continents and over 35 territories; the future looks bright for the streamer despite dark clouds and turbulence in the sector.

“FAST is clearly now and the future. We are scratching the surface of what this business could be,” Kuessner enthused. “In 2023, we ended the year on a global basis with seven billion total viewing hours, a key metric many of these different platforms use in terms of measurement. A third of that came from international. From 2022 to 2023, we grew 40 percent in total viewing hours, so something we’re doing is right and on target; people enjoy the content. Not only that but they’re coming back for more.”

She believes future success lies in Pluto TV’s six core strengths, which continue to define and differentiate the company. These include the aforementioned Paramount library and the user experience.

“We’re constantly innovating and iterating, and we want to ensure we get users to the content they want and as quickly as possible. That involves creating new categories and collapsing certain categories, and products and technology enhancements will continue to evolve, she said, adding that they have come a long way in terms of search and personalization mechanisms.

A jewel in Pluto TV’s crown is the rollout of the Home section on CTV, also known as Connected TV. It is effectively a branded app on a television.

“The last thing is leading distribution, which sets us apart from the market. We have over 30 different distribution partners here domestically, and that grows to 70 globally. Distribution gets us users. Those users find content that they love, so consumption increases. Consumption brings us impressions, and then impressions pique the interest of advertisers, and they want to bring their spends from linear to digital and to Pluto TV,” Kuessner concluded.

“We’re one of the only companies that does integrated distribution, and we paved the way in 2018. The CTV companies out in the marketplace, from Samsung, one of our early investors, to Vizio and LG, get a package of hand-selected Pluto channels that they put onto their platform, and there’s usually a Pluto-branded space. We see that as a massive growth opportunity for our company.”

“Finding new audiences and exposing new generations to our product will be critical to Pluto TV’s growth. We have a whole foreign programming aspect to our business, but there are a lot of audiences out there in the market that we still need to capture, and that’s a huge opportunity. We already see in the data that we over-index tremendously with African Americans, so we have created an entire initiative around that called the Black Collective, about 18 different channels that we sprinkled throughout our dial that are very targeted towards this audience, and we’re going to be creating more channels as time progresses. We also want to take advantage of these pop culture moments in time, and we’re looking to lean into that and make it a more significant part of our programming strategy in years to come.”

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