Just in case we needed more evidence of the central role that advanced TV is already beginning to play in the media ecosystem, this week’s announcement of the re-merger of CBS and Viacom underscored it, big-time.

In years past, the news would have been totally dominated by the traditional measures of power: ViacomCBS is now #1 in TV audience, with a 22% share of total prime-time viewers, and boasts a combined $8 billion in national TV ad revenue.

Not exactly footnotes, to say the least.

But the companies took great pains to put the combined entity’s reach and clout into the context of the advanced TV opportunities that the merger will enable. Why? Because that’s where they see the most significant growth paths for the future.

“The first part of our strategy is accelerating growth of our D2C offering… subscription and ad-supported offerings” — meaning CBS All Access, Showtime, Pluto TV, Nickelodeon’s Noggin and the forthcoming BET+ — stressed Viacom’s Bob Bakish, who will be president and CEO of ViacomCBS.

Bakish said the new company’s strategic focus will be on advanced advertising, along with content production. “We will be the first stop for advertisers and their agencies in the U.S. because of the audience we deliver… including addressable, branded content, influencer marketing and experiential,” he elaborated.

Viacom now projects that 20% of its domestic advertising revenue will come from advanced advertising, hitting nearly $700 million in revenue this year — and this advertising’s growth will be enhanced by the combined entity’s massive TV audience, said CBS President/acting CEO Joe Ianniello, who will serve as chairman and CEO of CBS in the combined company.

Both executives emphasized opportunities in leveraging synergies between the two companies’ premium content, including between subscription-driven and advertising-driven platforms.

“There is nothing at all preventing us from moving forward in terms of beginning to unlock that opportunity in the very near future,” Bakish declared in the call with analysts. “Obviously, it’s something that we will build on over time, but there’s some low-hanging fruit there we will seek to pick quite soon.”

One example: CBS announced just last week that CBS All Access is adding kids’ programming, and bringing Viacom’s Nickelodeon and Nick Jr. content into the mix is a natural for driving subscriber volume and revenue.

At the same time, predictions of the early demise of cable and broadcast TV are clearly premature, even just plain off the mark.

CBS and Viacom certainly aren’t downplaying the opportunities in traditional revenue streams. With larger viewership share, the combined company should be able to up its current 11% share of retransmission and affiliate revenues, Ianniello said.

Indeed, CBS reported last week that combined affiliate and subscription revenue rose 13% in its fiscal Q2, driven by CBS All Access and the Showtime OTT streaming services.

While total U.S. pay TV subscribers have dropped from 101 million to 87 million over the past six years, upfront revenues for broadcast and cable networks have risen 4.6% to 5.9% each year for the past five, according to Media Dynamics stats cited by MediaPost’s Wayne Friedman.

Nor was the ViacomCBS news the only development this week speaking to the melding of traditional and advanced TV.

Amid the public rancor and blackouts occurring as content producers push into D2C distribution and MVPDs seek to protect their interests, Charter Communications and The Walt Disney Company managed to hammer out a multiyear carriage renewal agreement.

Not only will Charter’s TV residential broadband services continue to provide customers with access to more than 20 Disney channels; the deal “contemplates” Charter’s future distribution of Disney’s streaming services, including Hulu, ESPN+ and the soon-to-come Disney+.

They even agreed to cooperate to crack down on password sharing and unauthorized access — common consumer activities that must certainly be putting a dent in potential new subscriber growth.

Could this be a sign that industry players are learning that give and take and productive synergies are not only possible, but a heck of a lot better in the long term for both sides, as well as consumers?

Source: https://www.mediapost.com/publications/article/339402/traditional-and-advanced-tv-are-melding-in-real-ti.html