(Bloomberg) — Comcast Corp. and ViacomCBS Inc. will join forces to launch a new streaming service in Europe, deciding it would be more cost effective to work together instead of compete in certain markets.
The new service, called SkyShowtime, will include programming from both companies’ studios and channels, including their respective streaming services, Peacock and Paramount+. It will arrive in more than 20 European markets next year. The companies didn’t say how much it would cost or what shows and movies would be on the service.
The partnership will be structured as a joint venture, with equal investment and joint control by ViacomCBS and Comcast, the companies said in a statement.
The move comes as both companies try to accelerate the global expansion of their streaming services and catch up with Netflix Inc., Walt Disney Co. and Amazon.com Inc. in a global race for subscribers.
The move signals the media giants’ willingness to deal at a time when analysts are expecting more industry consolidation, especially after the announcement this year that Discovery Inc. and AT&T Inc.’s WarnerMedia would merge. ViacomCBS Chairman Shari Redstone is reportedly open to striking deals, while Comcast has been debating how aggressively it wants to invest in Peacock. Comcast Chief Executive Officer Brian Roberts has considered a deal with ViacomCBS, the Wall Street Journal reported in June. Comcast executives, however, have said recently they’re happy with their portfolio of assets and don’t need to buy another company.
Comcast shares were little changed at 10:17 a.m. in New York, while ViacomCBS rose 5.3%.
Complex Decisions
The new venture is a sign of the complex decisions that media companies are making as they expand in streaming. Launching a streaming service globally is costly and entails investing in local programming, marketing, customer service and following data protection laws. The two companies have agreed to team up in mostly smaller markets, like Denmark, Finland and Hungary, where the substantial costs of going alone might outweigh any potential payoff. The joint venture means the companies will share those costs and the revenue from subscribers.
Launched nationwide in July 2020, Peacock has 54 million sign-ups and 20 million monthly active accounts. It will begin its international rollout later this year as a free service to 20 million Sky customers in Europe.
ViacomCBS said this month that it has about 42 million streaming subscribers, many of which pay for Paramount+. Earlier this month, ViacomCBS announced a deal to distribute Paramount+ on Sky’s platforms in Europe. Comcast, the U.S. cable giant, owns Sky, a major pay-TV provider in Europe.
While it will team up with ViacomCBS in some markets, Comcast plans to launch Peacock as a standalone app in Latin America, Australia, Asia, France and other markets. It plans to leverage NBC’s presence and relationships in many of those countries to help with Peacock’s expansion. The joint venture with ViacomCBS will help fund the tech platform that Peacock will operate on globally.
(Updates with additional details throughout.)
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