Viacom-CBS merger talks could resume soon
Viacom (VIAB) and CBS (CBS) are preparing to reopen merger talks this month, according to a CNBC report citing sources familiar with the matter. An attempt to merge the companies last year flopped, mostly because CBS drew a leadership lineup for the combined company that excluded Viacom executives.
The rise of cord-cutting is pushing traditional media companies to rethink their business strategies. The media industry has witnessed a number of megadeals in recent times as players respond to the shrinking traditional pay-TV market and a rise of digital video consumption. Walt Disney (DIS) spent $71.3 billion to purchase a package of entertainment assets from Fox (FOX). Disney is now gearing up to launch its own digital subscription video in November.
AT&T bought WarnerMedia for $85.4 billion last year to strengthen its media business, and it is now working on a new streaming video service expected to launch in the coming months. Comcast (CMCSA) bought European broadcaster Sky and is now preparing to enter the streaming video market next year.
Americans are ditching traditional pay-TV subscription
According to eMarketer estimates, 33 million Americans had abandoned traditional pay-TV subscriptions or cut the cord as of the end of 2018. By 2022, America is projected to have over 55 million cord-cutters. Since Viacom and CBS have also been affected by cord-cutting, there is a view that merging their operations would allow them to tap into each other’s strength and build a more powerful media force to better respond to the changing media landscape.