On streaming:
We have a strategy that allows Viacom to participate in all segments. We provide linear programming plus on-demand for
big bundles. In skinny bundles, were very well represented, and will be even better represented with CBS. In the subscription video-on-demand segment, we make
original hits for Netflix, Amazon, Hulu, and international services. We own and operate niche products like Noggin and BET+. And, of course, theres Pluto. Over time, with a combined Viacom-CBS,
well work on what our over-the-top streaming product is, and youll see that evolve.
On Pluto:
The beauty of Pluto is its premium content,
overwhelmingly watched on smart TVs, with long-form ads, and advertisers dont have to worry about questionable adjacencies [or ads running with inappropriate content]. In addition to being direct-to-consumer, Pluto is carried by Comcast and Cox. We have a very significant mobile deal were about to announce.
We can upsell people from Pluto to one of our pay services. A very common behavior in streaming is, you burn through whatever youre watching. In a
normal world, youd churn out. Here, we can retain you inside of Pluto and monetize you on a free basis [with advertising].
On future mergers and
acquisitions:
Of course, well look at things. But we just did our transformational deal. Theres no other deal we have to do. To the extent
that we do a deal, well make sure its linked clearly to our strategy and is value accretive for our shareholders. One of the misunderstandings in the marketplace is that were going to go on a dilutive M&A spree.
Were not going to do that.
On content spending:
Our $13 billion in combined content spending has grown modestly over time and will continue to grow modestly. But what people should focus on is the
content asset associated with that spending. Our focus will be on improving the utilization of that asset. We see a significant opportunity to improve returns on investment.
On stock buybacks:
The combined company produces very
substantial cash flow. The first and best use is to invest in our business, including content. Well continue to pay a modest dividend. Were not going to radically ramp it upwere not trying to run a utility. The third use of
cash, potentially, is M&A. Well look. Fourth, delevering. But both companies are investment grade today, and rating agencies like us better together than apart. That leaves excess cash flow. It allows us to be opportunistic in the market
should we want to buy back stock.