Is Pluto TV for Sale? It Could Be Challenging for Paramount

Is Pluto TV for sale?

The current leaders of Paramount Global reaffirmed their plan to sell assets as recently as this month’s second quarter earnings call. But the presumptive new owner of the company — Skydance Media — may have something else in mind.

Paramount’s Office of the CEO —who are in charge, for now — has made clear that assets with ties to the declining linear TV ecosystem would be put on the chopping block as the company looks to reduce $14.6 billion in long-term debt and boost its flagging stock price.

“The set of assets that make up Paramount Global today were built up through the rise of linear,” Chris McCarthy, one of the company’s three co-CEOs, said on Aug. 8. “And while we have strong brands and businesses, we must reshape our portfolio to best compete in the future. The assets under consideration are undeniably strong with exciting futures ahead but will be better served on their own or as a centerpiece of another business.”

On Monday, Paramount reportedly hired a bank to explore the possible sale of 12 local TV stations. The company has also floated selling BET, VH1, the Paramount lot (which would be leased back for the studio’s use) and Pluto TV, the free, ad-supported streaming TV platform (FAST) that offers both live linear and on-demand programming, sources familiar with the trio’s plan previously told TheWrap.

Pluto TV, which was purchased by predecessor Viacom for $340 million in cash in 2019, could draw interest from potential suitors such as Roku, analysts told TheWrap. But the platform is already a profitable, $1 billion-per-year business — an underutilized Paramount asset that could fit with the “tech hybrid” strategy of Skydance Media and RedBird Capital Partners. And Pluto’s ties to Paramount, from its programming to its role in the company’s ad sales business, could also make a potential sale of the asset challenging, analysts note.

“The sum of [Paramount’s] parts is actually better than the individual pieces set aside,” Evan Shapiro, a former IFC and Sundance Channel executive and professor at NYU’s Stern School of Business, told TheWrap. “The value is there in Pluto, the libraries of CBS and Paramount together, which are really intertwined and inextricable from each other.”

Representatives for Paramount and Skydance declined to comment.

Pluto fits into Skydance’s strategy

Late Monday, Edgar Bronfman Jr. dropped his $6 billion bid for Paramount, clearing the way for Skydance to acquire the company from Shari Redstone’s National Amusements for $8 billion in a deal Paramount’s board approved last month. The transaction, which is being funded by Oracle co-founder Larry Ellison and RedBird Capital Partners, is expected to close in the third quarter of 2025.

During a call with investors in July , RedBird’s Jeff Shell acknowledged the Skydance team viewed parts of Paramount as “not strategic.” But he referred to Pluto as a “very strong and powerful asset,” while RedBird’s Andy Gordon said that a merged Skydance and Paramount sees an opportunity in the tech platforms for Paramount+ and Pluto to drive “a lot more efficiency” and “further cash flow generation.”

“Paramount’s strategy of using FAST content as a flywheel to drive viewers to premium platforms seems like a sound one,” Hub Entertainment Research founder Jonathan Giegengack told TheWrap. “Pluto itself is profitable, which means new owners would have more runway to pursue that strategy. And Pluto, and FAST platforms in general also seem to align with the broad strokes of Skydance’s strategy to make Paramount behave more like a tech company than a legacy media one.”

Still, both Shell and Paramount Co-CEO Brian Robbins have said that Skydance is “very supportive” of the Office of the CEO’s strategic plan, which includes potential asset sales.

“I know current management is also talking about a couple of transactions that if they get the right price, we’ll be supportive of,” Shell said in July.

Is there a buyer for Pluto?

Among the possible buyers for Pluto is the platform’s co-founder Tom Ryan, who has had discussions about buying it back, said streaming analyst Dan Rayburn. A spokesperson for Ryan, who currently serves as Paramount Streaming’s CEO, declined to comment.

Walmart, which announced plans to buy Vizio for $2.3 billion in February, and Roku, which operates FAST competitor The Roku Channel, could utilize Pluto’s international presence in over 35 markets and four continents to expand their streaming footprints globally, Shapiro said.

And Netflix, which has reportedly toyed with the idea of offering a free version of its service overseas, according to Bloomberg , could also use Pluto to help scale its ads business, Andrew Rosen, a former BET and MTV Networks executive, told TheWrap.

But it’s relatively easy for companies to create their own FAST offerings. And some media companies, like NBCUniversal and Warner Bros. Discovery, have found it cost-effective to license content and partner directly with existing FAST platforms like Tubi, the Roku Channel and Amazon Freevee.

“The reality is that [FAST] is a model that works for everybody,” said Rosen. “There are enough software developers out there who can just produce and build one and get some form of scale pretty easily.”

Representatives for Roku declined to comment, while Netflix and Walmart did not immediately return TheWrap’s request for comment.

An extension of Paramount’s ad sales business

Pluto’s product and advertising capabilities also offer Paramount an opportunity to capture more of the linear audience shifting to streaming — and the ad dollars going with it — by providing the company’s sales team with ad inventory and a user interface that replicates traditional TV.

“By and large, they look at [Pluto] as an extension of their ad sales,” Rosen said.

As traditional media look to manage linear’s decline, the widespread availability of FAST platforms and competition from YouTube and Prime Video are making upfront negotiations tougher for the major SVOD players, Media Dynamics, which tracks upfront ad sales, said in a recent report . The firm estimates that a total of $45 billion to $50 billion is spent on national TV upfront buys, leaving about $10-12 billion remaining for scatter deals.

When looking solely at primetime TV, ad sales across streaming, broadcast and cable grew 8.1% to $29.5 billion during upfronts for the 2024-25 season, compared to $27.3 billion the year before. And streaming posted a 35% increase to $11.1 billion, while linear fell 3.7% to $18.4 billion.

The cost-per-thousand-impressions (CPMs) for a 30-second message fell 5.6% to $43.35 for broadcast and 6.8% to $20.60 for cable as ad buyers successfully won concessions from linear TV ad sellers. Meanwhile, streaming CPMs fell 16.7% as dollars shifted to FASTs, Amazon or YouTube, who offered more favorable pricing options. Overall, the total TV CPM fell 9.8% to $31.70.

While these advertising trends seemingly spell trouble for Paramount Global and other traditional media giants, Pluto offers an opportunity to bridge the gap between Paramount’s streaming and linear businesses, an individual with knowledge of the matter told TheWrap.

“There’s this beautiful synergy where the scale of the Paramount Global ad sales business was a dramatic accelerant to Pluto,” the person said. “But having Pluto in the market is helping Paramount Global ad sales stay relevant with a cutting-edge product reaching incremental users.”

Tubi vs Pluto

Regardless of whether Paramount sells or keeps Pluto, the platform faces fierce competition in the FAST space, with Tubi as its primary rival. Pluto’s share of total TV usage tracked by Nielsen still lags behind all of the major streamers, as well as Tubi and The Roku Channel.

In Nielsen’s Gauge report for July, Pluto TV accounted for 0.7% of streaming’s total 41.4% share of TV usage. The Roku Channel and Tubi’s total TV usage were at 1.6% and 2.1% with both platforms surpassing the TV viewing shares of Max, Peacock and Paramount+ for the month of July; Tubi also tied with Disney+.

While the majority of Pluto’s viewership is focused on live linear, Tubi drives most of its viewing through on-demand content, leading to “more sustained and habitual” and engaged viewing, Giegengack said. Tubi has positioned itself as a supplement to SVOD platforms, with a diverse range of both original and licensed content.

“Rather than trying to be all things to all viewers, they’ve built content for specific audiences and content communities like UFOs or anime,” he added.

One way to alleviate Pluto TV’s viewership share problem is through more promotion, Shapiro said. He called its underutilization in connection with Paramount, CBS and the rest of the enterprise “a bit confounding.”

“You watch an NFL football game on Fox on Sunday and there’s a Tubi spot in every break,” Shapiro said. “Pluto just does not get the same love and there’s a lack of enterprise wide promotion of that platform and lack of connecting Pluto to Paramount+ and the rest of the ecosystem.”

Expanding Pluto’s reach

Despite having to make trade-offs between Pluto and Paramount+ with regard to content and marketing resources, Paramount Global is making progress in turning its entire DTC business profitable while driving more engagement.

In the second quarter of 2024, Paramount+ reported its first-ever quarterly profit of $26 million. And in the first half of 2024, Pluto delivered 3.7 billion viewing hours, up 8% year over year and its highest consumption ever, executives revealed during Q2 earnings. The division is collectively approaching an $8 billion run rate, an individual familiar with the matter told TheWrap.

Rather than focusing on original content, which can be risky and expensive, Pluto is relying on Paramount’s deep catalog — hundreds of thousands of hours of programming — which is “particularly well suited for FAST, especially linear FAST,” the individual said.

Longer term, Pluto is focused on investing in incremental reach and exposing more viewers to VOD content. One way it’s doing that is through partnerships with TV hardware-makers like Samsung, Vizio, LG and Roku where its programming guide makes up a portion of what ships with their product.

The platform is also planning to launch additional FAST channels on The Roku Channel on a rolling basis and is looking to expand beyond the connected TV living room and strike more partnerships with businesses like hotels to further expand its reach.

“We call it integrated distribution, where our app is distributed on every major platform and a certain set of channels is distributed on an integrated basis into the native guide,” the individual familiar with the matter said. “We’re doubling down on the strategy. You’ll see more channels and better channels that are living within the integrated guide.”

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