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How free streaming-TV services are trying to capitalize on big viewership increases, from fast-tracking channel launches to ramping up news programming

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News on Pluto TV.
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  • Free streaming-TV services like Pluto TV and Xumo are fast-tracking channel launches and leaning into news, education, and "lean-back" programming, to attract viewers who have more time at home.
  • A recent spike in streaming-video viewership, driven by people who are staying home to help slow the spread of the novel coronavirus, could take these businesses to the next level.
  • ViacomCBS' Pluto TV has in recent weeks launched more news channels and bingeable networks with around-the-clock programming such as "Cops" or James Bond movies — and benefitted from a new brand campaign that had been planned prior to the pandemic.
  • Xumo, owned by Comcast, has also been fast-tracking channel launch for kids and "comfort" viewers, while putting news front and center in its platform.
  • The hope among streaming-TV companies is that where audiences go, advertisers will eventually follow. 
  • Click here for more BI Prime stories.

Free streaming-TV services like Pluto TV and Xumo are fast-tracking channel launches and doubling down on increasingly popular categories like news, education, and "lean-back" programming, in the hopes that the industry-wide surge in streaming will be a boon for them.

Free streaming TV is a fairly nascent medium. These services curate channels, similar to traditional TV, but they're not the same linear channels you'd find on cable. One channel could play James Bond movies 24/7. Another could stream the top news stories from a major network like CNN. The platforms tend to be nimbler than cable; with some "pop-up channels" lasting only a month or two to capitalize on entertainment events.

Pluto TV, Xumo, and Tubi have been gaining ground with viewers a few years now, as people abandon traditional TV services and search for cheaper, streaming alternatives to complement subscriptions likes Netflix.

And they've become hot acquisition targets for major media brands. ViacomCBS bought Pluto TV in 2019. Comcast acquired Xumo this year. And Fox just snapped up Tubi. 

But they haven't quite broken into the mainstream yet. But the recent spike in streaming-video viewership around the world, driven by people who are staying home in an effort to slow the spread of the novel coronavirus, could be the watershed moment that turns these services into a daily habit for viewers. 

Time spent streaming on TVs in the US rose 12% during the week ending March 22 compared with the prior week, according to video-technology company Wurl, which says it tracks viewing habits of about 5 million viewers on connected TVs.

Xumo said on Friday that its streaming hours were up about 30% month over month. And Pluto TV said daily active users and total viewing hours saw a double-digit percentage rise since the World Health Organization declared the coronavirus a pandemic on March 11, but declined to share precise figures.

"This is the last catalyst we would ever want for our business," said Tom Ryan, chief executive of Pluto TV. "But when people are cooped up at home and also becoming more budget conscious, free streaming TV is a very compelling value proposition."

That said, more viewership doesn't necessarily mean more revenue for these platforms. Services like Pluto TV and Xumo make most of their money from advertising, and streaming TV doesn't yet capturing the ad dollars that traditional TV has.

Ad spending also tends to decline during economic downturns.

But these companies are betting advertisers will eventually shift to where audiences are.

Streaming TV services are leaning into news and information, as well as 'lean-back' programming to stand out

To capture the attention of viewers who are spending more time at home, Pluto and Xumo have been fast-tracking channel launches and leaning into the kinds of programming that audiences seem to be drawn to right now, like news, education, and "lean-back" content.

Viewers are especially interested in news, with information about the coronavirus breaking hour by hour. Both services are putting news front and center on their platforms.

"People are spending more time on their screens but they're not necessarily trying to pick out something to binge-watch," said Stefan Van Engen, senior vice president of content programming and acquisitions at Xumo. "It's really information and lean-back [programming] that they're looking for."

News consumption was up 50% on Xumo during the week ending March 22, compared with two weeks earlier, the company said. Van Engen said Xumo is promoting news more in its platform to meet audience demand.

Pluto TV — which expects to reach 30 million monthly active users by the year's end — launched two conservative news channels this month, America's Voice News and BlazeTV, to complement other news channels that have been performing well, including CBSN, NBC News Now, CNN, as well as local affiliates CBSN Los Angeles and New York.

And both companies are trying to balance news and information with lighter, entertainment programming.

Pluto and Xumo are doubling down on kids and family content, since many children home from schools and families are spending more time together in isolation. Xumo is fast-tracking a kids channel that it aims to launch by May. And Pluto is in talks with content partners, including sister company Nickelodeon, to boost its selection of educational and entertainment programming for children. 

Xumo has been speeding through the launches of new lean-back, "comfort" channels, such as food, comedy, and entertainment programming, as well as kids and family content, which it says are two categories that have been popular with viewers in recent weeks. It launched four new channels in March including an Antiques Roadshow UK channel, which it moved up to provide viewers with more programming to watch in the background.

Van Engen said it usually takes Xumo six to eight weeks to launch a channel, but it can do so in two to three weeks when there is a real opportunity. "We are able to prioritize and fast track things that'll work," he said.

Pluto, meanwhile, is seeing an uptick in its bingeable channels centered on a single property, like "Baywatch" or "Forensic Files." It launched an around-the-clock channel in March dedicated to the TV series "Cops" and brought back its James Bond channel.

"While the parents want to be informed, they also want to escape from the news cycle," Ryan said. "On the other hand, the kids want to be entertained and parents want to make sure they're being educated."

Doubling down on digital advertising

Across the board, streaming-video services are also spending more to promote their content in device platforms. Vizio said its content partners in both streaming and linear TV are investing more to promote their content within its platforms.

"We're starting to see more that people are using the platform for search and discovery and they're finding new options beyond what are the typical apps that most consumers know of or use," said Mike O'Donnell, senior vice president of Vizio's platform business.

Pluto, meanwhile, is also benefiting from a brand campaign it began rolling out in March, before the coronavirus outbreak took hold in the US. The campaign included ads on TV, billboards, and digital platforms, as Variety reported. Ryan said the company is pulling back on the out-of-home portion of the campaign and focusing more on digital for the time being.

"We have been pivoting to try to double down wherever we can on more digital advertising to get in front of users with this new campaign," Ryan said, adding that the company will "go back big with out-of-home in due time."

More viewers doesn't always mean more revenue

Still, more viewers doesn't always translate into higher advertising revenue. The Wall Street Journal's Sahil Patel reported that the recent rise in viewership is not yet boosting advertising dollars for streaming-video companies.

Indeed, ad spending has started to dip, as tends to happen during economic downturns, the execs at Vizio and Pluto confirmed. It's mainly travel and quick-service restaurant companies that are pulling back on spending, O'Donnell at Vizio said.

Travel and hospitality and real-estate advertisers have decreased ad spending by more than 70% from the week ending March 22 compared with the previous week, SpotX, an online-video-advertising platform, found. Other categories, like gaming, alcohol, and lottery, increased spending during that time period. 

Overall, ad inventory on streaming-TV services is up, which could be because of higher viewership or advertisers pulling campaigns and re-opening some inventory, SpotX CEO Mike Shehan said. 

SpotX saw a 16% increase in ad inventory at digital-first streaming services, which include platforms like Pluto and Xumo, from the week ending March 18 compared with the previous week. Inventory spikes were highest in education, electronic gaming, entertainment, weather, and news-related programming

The hope among streaming-TV companies is that where audiences go, advertisers will eventually follow. 

"The growth of viewership of OTT has been outpacing the advertiser spend," Shehan said. "This period of time could result in something very good for [over-the-top] industry. Advertisers are forced to recognize that audiences are moving to OTT ... In a strange way this could shake the tree."

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