WEBVTT 00:00:00.000 --> 00:00:03.799 Welcome to today's deep dive. We're looking at 00:00:03.799 --> 00:00:09.080 a a 14 year corporate saga that fundamentally 00:00:09.080 --> 00:00:11.839 shaped how you watch television and consume media 00:00:11.839 --> 00:00:14.720 today. Yeah, it really did. It's the story of 00:00:14.720 --> 00:00:18.039 Viacom between the years 2005 and 2019. This 00:00:18.039 --> 00:00:20.000 is a company that intentionally broke itself 00:00:20.000 --> 00:00:23.160 in half, sued the Internet and then basically 00:00:23.160 --> 00:00:25.059 desperately tried to glue itself back together. 00:00:25.160 --> 00:00:28.199 It is an incredibly revealing narrative and just 00:00:28.199 --> 00:00:31.089 set the stage. Our material today comes entirely 00:00:31.089 --> 00:00:34.270 from an extensive, meticulously documented Wikipedia 00:00:34.270 --> 00:00:37.630 article. It chronicles this exact second incarnation 00:00:37.630 --> 00:00:39.850 of the company. Right. And our mission for you 00:00:39.850 --> 00:00:42.469 today is to unpack this timeline so you can truly 00:00:42.469 --> 00:00:44.670 understand how the shifting tectonic plates of 00:00:44.670 --> 00:00:48.130 the media landscape over this specific period 00:00:48.130 --> 00:00:50.490 directly created the entertainment ecosystem 00:00:50.490 --> 00:00:52.640 you interact with right now. I mean, every time 00:00:52.640 --> 00:00:54.100 you open a streaming app, you are essentially 00:00:54.100 --> 00:00:56.100 looking at the fallout of the boardroom battles 00:00:56.100 --> 00:00:58.240 we are going to discuss today. OK, let's unpack 00:00:58.240 --> 00:01:00.539 this by starting with the very bizarre origin 00:01:00.539 --> 00:01:02.960 story of what we call the second Viacom. The 00:01:02.960 --> 00:01:06.280 date is December 31, 2005. The original Viacom, 00:01:06.420 --> 00:01:09.019 which was an absolute titan of media, officially 00:01:09.019 --> 00:01:11.640 splits itself into two completely separate publicly 00:01:11.640 --> 00:01:14.680 traded companies. Yeah. Which is pretty wild. 00:01:14.900 --> 00:01:17.540 On one side, you have CBS Corporation and on 00:01:17.540 --> 00:01:20.459 the other, the newly formed Viacom. And both 00:01:20.459 --> 00:01:24.000 are still ultimately controlled by the billionaire 00:01:24.000 --> 00:01:26.819 media mogul Sumner Redstone through his theater 00:01:26.819 --> 00:01:29.840 company, National Amusements. But they're operating 00:01:29.840 --> 00:01:32.519 independently. Yeah. Now, voluntarily fracturing 00:01:32.519 --> 00:01:35.939 a highly successful conglomerate is, well, it's 00:01:35.939 --> 00:01:38.459 totally counterintuitive. It is, yeah. But looking 00:01:38.459 --> 00:01:40.819 at the financials, Viacom was dealing with a 00:01:40.819 --> 00:01:43.200 stagnating stock price. Investors are getting 00:01:43.200 --> 00:01:46.079 restless. So Redstone and the board engineered 00:01:46.079 --> 00:01:48.359 a creative financial solution to give Wall Street 00:01:48.359 --> 00:01:50.859 a menu with two very different options. Which 00:01:50.859 --> 00:01:53.540 was kind of unheard of at that scale. Precisely. 00:01:53.620 --> 00:01:55.579 By splitting the company, they offered investors 00:01:55.579 --> 00:01:59.579 two distinct types of value. CBS became the high 00:01:59.579 --> 00:02:01.900 cash flow dividend paying stock. Right, the safe 00:02:01.900 --> 00:02:05.140 bet. Exactly. It housed the legacy over the air 00:02:05.140 --> 00:02:07.420 broadcasting network, television production, 00:02:07.719 --> 00:02:10.219 publishing assets. It was stable and it threw 00:02:10.219 --> 00:02:13.129 off cash. The new Viacom, on the other hand, 00:02:13.349 --> 00:02:15.650 was positioned as the high growth entity. It 00:02:15.650 --> 00:02:18.129 was designed to take more risks, reinvest its 00:02:18.129 --> 00:02:20.870 capital, and aim for sweeping expansion rather 00:02:20.870 --> 00:02:23.069 than, you know, paying out dividends. But we 00:02:23.069 --> 00:02:24.830 can't just look at the spreadsheets here because 00:02:24.830 --> 00:02:27.770 the reality is Sumner Redstone had two towering 00:02:27.770 --> 00:02:30.669 egos under him and only one throne. Oh, absolutely. 00:02:31.039 --> 00:02:33.639 You had this fierce executive rivalry brewing 00:02:33.639 --> 00:02:35.780 at the top between Les Moonves, the powerhouse 00:02:35.780 --> 00:02:38.620 head of CBS, and Tom Freston, the visionary head 00:02:38.620 --> 00:02:40.860 of MTV Networks. And Redstone was looking toward 00:02:40.860 --> 00:02:43.439 his eventual retirement. So splitting the company 00:02:43.439 --> 00:02:45.439 was essentially corporate couples counseling. 00:02:45.599 --> 00:02:48.060 It gave both of these ambitious executives their 00:02:48.060 --> 00:02:51.080 own empires to run rather than forcing a brutal 00:02:51.080 --> 00:02:54.060 succession battle. That human element is just 00:02:54.060 --> 00:02:56.639 crucial and actually intersects with a surprising 00:02:56.639 --> 00:02:59.080 cultural moment that contributed to the split. 00:02:59.259 --> 00:03:01.379 Yeah, the source material points to the 2004 00:03:01.379 --> 00:03:04.439 MTV Super Bowl halftime show controversy. Right, 00:03:04.539 --> 00:03:07.900 the wardrobe malfunction. Exactly. That infamous 00:03:07.900 --> 00:03:10.400 moment resulted in MTV being permanently banned 00:03:10.400 --> 00:03:12.900 from producing any future Super Bowl halftime 00:03:12.900 --> 00:03:16.139 shows. And because CBS broadcasts that specific 00:03:16.139 --> 00:03:19.000 Super Bowl, the fallout created significant internal 00:03:19.000 --> 00:03:21.280 friction between the broadcast side and the cable 00:03:21.280 --> 00:03:23.770 side. of a company. It's remarkable to think 00:03:23.770 --> 00:03:26.830 a halftime show helped fracture a media empire. 00:03:27.449 --> 00:03:29.710 But it shows how one misstep by one division 00:03:29.710 --> 00:03:32.150 can just threaten the core business of another. 00:03:32.810 --> 00:03:35.610 So the split happens. Freston's new Viacom gets 00:03:35.610 --> 00:03:38.370 all the youth -oriented and cable assets. We're 00:03:38.370 --> 00:03:41.430 talking MTV, BET, Nickelodeon, and Paramount 00:03:41.430 --> 00:03:44.169 Pictures. What's fascinating here is how perfectly 00:03:44.169 --> 00:03:46.569 this split encapsulates the prevailing media 00:03:46.569 --> 00:03:49.469 philosophy of the mid -2000s. How so? Well, at 00:03:49.469 --> 00:03:51.330 that moment, Wall Street and the industry at 00:03:51.330 --> 00:03:53.509 large firmly believed that cable television was 00:03:53.509 --> 00:03:56.569 the ultimate unstoppable growth engine. Legacy 00:03:56.569 --> 00:03:59.030 broadcast was viewed as a slow, mature business. 00:03:59.270 --> 00:04:01.889 But cable, cable double -dipped. Ah, the affiliate 00:04:01.889 --> 00:04:03.590 fees. Right. You didn't just get advertising 00:04:03.590 --> 00:04:05.810 revenue. You got guaranteed monthly affiliate 00:04:05.810 --> 00:04:08.110 fees from every single cable subscriber, whether 00:04:08.110 --> 00:04:10.310 they watched your specific channels or not. It 00:04:10.310 --> 00:04:12.580 was a highly lucrative model. Which brings us 00:04:12.580 --> 00:04:16.860 into the mid -2000s, a time when this new independent 00:04:16.860 --> 00:04:20.139 Viacom flush with that growth engine mandate 00:04:20.139 --> 00:04:22.819 went on a massive spending spree. They really 00:04:22.819 --> 00:04:25.399 did. I want you to think back to this specific 00:04:25.399 --> 00:04:29.019 era of the internet. It was a complete Wild West. 00:04:29.269 --> 00:04:32.209 Social media as we know it barely existed, and 00:04:32.209 --> 00:04:34.449 legacy media executives were terrified of losing 00:04:34.449 --> 00:04:36.790 their young audience to message boards and digital 00:04:36.790 --> 00:04:39.470 portals. They were desperately throwing millions 00:04:39.470 --> 00:04:41.970 of dollars at anything that seemed remotely relevant 00:04:41.970 --> 00:04:44.990 to teenagers. And Viacom's shopping cart during 00:04:44.990 --> 00:04:49.149 this period is eclectic. In June 2005, they scooped 00:04:49.149 --> 00:04:52.129 up Neopets. If you remember feeding your virtual 00:04:52.129 --> 00:04:54.610 shoy -roo back then, you were actually part of 00:04:54.610 --> 00:04:56.970 Viacom's scramble for digital relevance. They 00:04:56.970 --> 00:04:59.009 were systematically trying to buy their way into 00:04:59.009 --> 00:05:01.110 the digital habits of a younger demographic. 00:05:01.649 --> 00:05:04.589 They acquired a gaming chat platform called Xfire 00:05:04.589 --> 00:05:07.629 and a site called Game Trailers. Oh, wow. Yeah. 00:05:07.730 --> 00:05:10.410 And in 2006, they purchased Harmonix, the video 00:05:10.410 --> 00:05:12.649 game developer behind the surging rhythm game 00:05:12.649 --> 00:05:16.639 genre. They paid $175 million for that. And while 00:05:16.639 --> 00:05:18.959 they were buying up virtual pets and video game 00:05:18.959 --> 00:05:21.500 developers, they were still playing in the traditional 00:05:21.500 --> 00:05:24.980 Hollywood sandbox. They bought DreamWorks pictures, 00:05:25.720 --> 00:05:28.240 specifically the live action studio, though not 00:05:28.240 --> 00:05:30.860 the animation wing or the highly valuable back 00:05:30.860 --> 00:05:34.420 catalog archive. It was a strategy of basically 00:05:34.420 --> 00:05:36.990 buying anything that moved. You can see the anxiety 00:05:36.990 --> 00:05:39.370 playing out in real time. They had these highly 00:05:39.370 --> 00:05:42.449 valuable youth brands like MTV and Nickelodeon, 00:05:42.670 --> 00:05:44.509 and they needed to build a moat around them. 00:05:44.949 --> 00:05:46.870 And this push into digital wasn't limited to 00:05:46.870 --> 00:05:49.149 acquisitions, it extended to strategic alliances. 00:05:50.000 --> 00:05:53.579 In December 2007, Viacom struck a sweeping five 00:05:53.579 --> 00:05:56.800 -year, $500 million deal with Microsoft. Half 00:05:56.800 --> 00:05:59.160 a billion dollars is a serious alliance for that 00:05:59.160 --> 00:06:01.620 era. It was a highly integrated agreement. Microsoft 00:06:01.620 --> 00:06:04.199 was allowed to license a huge library of Viacom 00:06:04.199 --> 00:06:06.959 shows for Xbox Live and the MSN network. But 00:06:06.959 --> 00:06:09.240 more importantly, it made Microsoft the exclusive 00:06:09.240 --> 00:06:12.519 provider for Viacom's unsold web ad inventory. 00:06:12.759 --> 00:06:15.420 Wait, so Viacom outsourced it? Essentially, yes. 00:06:15.980 --> 00:06:18.459 They outsourced the monetization of their leftover 00:06:18.459 --> 00:06:20.959 digital space to Microsoft's ad serving division. 00:06:21.660 --> 00:06:23.920 It was a mutually beneficial attempt by both 00:06:23.920 --> 00:06:26.339 companies to build a bulwark against the rising 00:06:26.339 --> 00:06:29.139 centralized power of Google. And speaking of 00:06:29.139 --> 00:06:31.899 Google, that is the perfect pivot to our next 00:06:31.899 --> 00:06:34.160 major chapter, because if you want to understand 00:06:34.160 --> 00:06:37.019 Viacom's digital strategy in the late 2000s, 00:06:37.160 --> 00:06:39.540 you have to look at one of the most defining 00:06:39.540 --> 00:06:43.160 legal battles of the early Internet, the one 00:06:43.160 --> 00:06:46.600 billion dollar YouTube war. This is a critical 00:06:46.600 --> 00:06:49.300 inflection point in Internet history. In 2007, 00:06:49.339 --> 00:06:52.000 YouTube was a relatively new, rapidly scaling 00:06:52.000 --> 00:06:54.899 video sharing site. And it was absolutely flooded 00:06:54.899 --> 00:06:57.839 with copyrighted material. Viacom looked at YouTube 00:06:57.839 --> 00:07:00.100 and saw an existential threat to their cable 00:07:00.100 --> 00:07:02.519 business model. So they fired a warning shot 00:07:02.519 --> 00:07:04.980 that echoed across the entire tech sector. They 00:07:04.980 --> 00:07:07.740 sent upwards of 100 ,000 Digital Millennium Copyright 00:07:07.740 --> 00:07:11.180 Act or DMCA takedown notices to YouTube. A hundred 00:07:11.180 --> 00:07:14.060 thousand notices in one wave. And they followed 00:07:14.060 --> 00:07:18.139 that up. in March 2007 by suing Google and YouTube 00:07:18.139 --> 00:07:22.660 for $1 billion. The numbers cited in the complaint 00:07:22.660 --> 00:07:25.399 highlight the scale of the issue. Viacom claimed 00:07:25.399 --> 00:07:28.660 that almost 160 ,000 unauthorized clips of their 00:07:28.660 --> 00:07:31.160 programming had been uploaded, generating more 00:07:31.160 --> 00:07:35.279 than 1 .5 billion views. It was massive. The 00:07:35.279 --> 00:07:37.939 core of their argument was that YouTube was building 00:07:37.939 --> 00:07:41.600 its audience and its subsequent ad revenue directly 00:07:41.600 --> 00:07:44.050 on the back of Viacom's stolen property. And 00:07:44.050 --> 00:07:46.110 this lawsuit quickly morphed from a corporate 00:07:46.110 --> 00:07:48.610 dispute into a sweeping digital privacy scare 00:07:48.610 --> 00:07:52.009 that affected everyday web users. In July 2008, 00:07:52.149 --> 00:07:54.209 the presiding judge, Louis Stanton, issued a 00:07:54.209 --> 00:07:56.170 highly controversial ruling. I remember this. 00:07:56.430 --> 00:07:58.750 He ordered YouTube to hand over a staggering 00:07:58.750 --> 00:08:01.790 amount of data to Viacom, specifically the database 00:08:01.790 --> 00:08:04.110 logs detailing the viewing habits of every single 00:08:04.110 --> 00:08:06.310 user who had ever watched videos on the platform. 00:08:06.470 --> 00:08:08.250 The Internet completely lost its mind over this. 00:08:08.470 --> 00:08:10.810 The idea that every video clip you clicked on 00:08:10.810 --> 00:08:13.129 linked directly to your IP address would be handed 00:08:13.100 --> 00:08:15.560 over to a media conglomerate for litigation was 00:08:15.560 --> 00:08:18.379 terrifying. It was a chilling prospect for digital 00:08:18.379 --> 00:08:21.680 privacy. Fortunately, before the transfer occurred, 00:08:22.120 --> 00:08:24.160 Google and Viacom reached an agreement allowing 00:08:24.160 --> 00:08:27.240 Google to anonymize the data. They stripped out 00:08:27.240 --> 00:08:29.459 the identifiable user information before handing 00:08:29.459 --> 00:08:32.360 it over, but the legal battle over the copyright 00:08:32.360 --> 00:08:35.200 infringement itself raged on for years, playing 00:08:35.200 --> 00:08:37.679 out in a volatile series of rulings. Let's track 00:08:37.679 --> 00:08:39.799 that legal ping pong, because it really kept 00:08:39.799 --> 00:08:42.809 the startup world on edge. In 2010, The judge 00:08:42.809 --> 00:08:45.409 ruled in Google's favor, stating they were protected 00:08:45.409 --> 00:08:47.830 by the safe harbor provisions of the Digital 00:08:47.830 --> 00:08:50.230 Millennium Copyright Act. And the basic premise 00:08:50.230 --> 00:08:52.669 of Safe Harbor is that a platform cannot be held 00:08:52.669 --> 00:08:55.289 liable for what its users upload, provided the 00:08:55.289 --> 00:08:58.029 platform acts in good faith to remove copyrighted 00:08:58.029 --> 00:09:00.169 material once they are properly notified by the 00:09:00.169 --> 00:09:02.970 owner. But then in 2012, an appeals court stepped 00:09:02.970 --> 00:09:05.230 in and overturned that ruling. The appeals court 00:09:05.230 --> 00:09:07.350 concluded that a reasonable jury could find that 00:09:07.350 --> 00:09:09.809 YouTube actually knew about specific infringing 00:09:09.809 --> 00:09:12.330 activity and intentionally turned a blind eye. 00:09:12.539 --> 00:09:14.399 To put that in perspective, the appeals court 00:09:14.399 --> 00:09:16.600 essentially said you can't just be the landlord 00:09:16.600 --> 00:09:19.340 of a building, watch people run in a legal casino 00:09:19.340 --> 00:09:22.200 in your lobby every day, and then claim you're 00:09:22.200 --> 00:09:24.320 protected from prosecution just because you occasionally 00:09:24.320 --> 00:09:26.080 kick one person out when the police complain. 00:09:26.620 --> 00:09:29.399 That ruling terrified the tech world. Exactly. 00:09:29.519 --> 00:09:32.320 It created a highly tense environment where Any 00:09:32.320 --> 00:09:34.919 platform hosting user generated content felt 00:09:34.919 --> 00:09:37.960 incredibly vulnerable. The source text quotes 00:09:37.960 --> 00:09:40.620 Eric Goldman, a professor at the Santa Clara 00:09:40.620 --> 00:09:43.120 University School of Law, who expressed deep 00:09:43.120 --> 00:09:45.919 concern over this 2012 reversal. What was his 00:09:45.919 --> 00:09:48.559 take? He worried it would severely negatively 00:09:48.559 --> 00:09:51.360 affect startups, making them, as he phrased it, 00:09:51.659 --> 00:09:54.100 more hair trigger on taking down news or content 00:09:54.100 --> 00:09:56.740 for fear that failure to do so will be held against 00:09:56.740 --> 00:09:59.370 them. After all this drama, years of headlines, 00:09:59.610 --> 00:10:01.690 and billions of dollars discussed, the ending 00:10:01.690 --> 00:10:05.850 is surprisingly anticlimactic. In 2014, the two 00:10:05.850 --> 00:10:08.529 companies quietly settled. According to reports 00:10:08.529 --> 00:10:11.090 at the time, no money actually changed hands. 00:10:11.210 --> 00:10:13.330 They just walked away. If we connect this to 00:10:13.330 --> 00:10:16.029 the bigger picture, that single lawsuit, even 00:10:16.029 --> 00:10:18.490 without a financial payout, effectively drew 00:10:18.490 --> 00:10:20.690 the battle lines for copyright on the modern 00:10:20.690 --> 00:10:23.470 Internet. It forced platforms like YouTube to 00:10:23.470 --> 00:10:26.409 develop incredibly sophisticated content ID systems 00:10:26.409 --> 00:10:30.269 to automatically detect, flag, and either monetize 00:10:30.269 --> 00:10:33.169 or block copyrighted material. Viacom didn't 00:10:33.169 --> 00:10:35.629 get their billion dollars, but they forced tech 00:10:35.629 --> 00:10:38.049 giants to architect the automated enforcement 00:10:38.049 --> 00:10:41.070 systems we all live with today. That is a lasting 00:10:41.070 --> 00:10:43.850 legacy. But while Viacom was fighting the Internet 00:10:43.850 --> 00:10:46.070 of the future, they were also fighting for their 00:10:46.070 --> 00:10:48.230 life in the traditional television space of the 00:10:48.230 --> 00:10:51.070 present. Moving into the 2010s, we enter the 00:10:51.070 --> 00:10:53.710 era of the cable wars and some intense corporate 00:10:53.710 --> 00:10:56.919 maneuvering. The 2010s were defined by a shift 00:10:56.919 --> 00:10:59.480 in leverage. For decades, companies like Viacom 00:10:59.480 --> 00:11:01.500 could demand higher and higher carriage fees 00:11:01.500 --> 00:11:04.600 from cable and satellite providers. But as cord 00:11:04.600 --> 00:11:07.080 cutting began to impact subscriber numbers, those 00:11:07.080 --> 00:11:09.179 providers started pushing back aggressively to 00:11:09.179 --> 00:11:11.659 protect their margins. And that leads to the 00:11:11.659 --> 00:11:14.559 era of the blackout. The most notable showdown 00:11:14.559 --> 00:11:18.399 happened in July 2012 between Viacom and the 00:11:18.399 --> 00:11:21.000 satellite provider DirecTV. They couldn't agree 00:11:21.000 --> 00:11:24.460 on rates, and Viacom pulled 17 channels, including 00:11:24.460 --> 00:11:26.679 heavyweights like Nickelodeon, MTV, and Comedy 00:11:26.679 --> 00:11:29.679 Central, from 20 million DirecTV subscribers. 00:11:29.840 --> 00:11:32.799 Just a blank screen. And the insight here isn't 00:11:32.799 --> 00:11:34.960 just that they played hardball. It's how they 00:11:34.960 --> 00:11:36.980 utilized their digital assets during the fight. 00:11:37.320 --> 00:11:39.980 When DirecTV told its angry customers to just 00:11:39.980 --> 00:11:42.639 go watch the recent episodes of these shows online 00:11:42.639 --> 00:11:45.960 on Viacom's own websites, Viacom implemented 00:11:45.960 --> 00:11:48.539 a temporary slim down. Yes, they intentionally 00:11:48.539 --> 00:11:50.639 pulled their own recent episodes off their own 00:11:50.639 --> 00:11:52.820 free websites. They viewed the internet purely 00:11:52.820 --> 00:11:54.759 as a weapon to protect their cable revenues, 00:11:55.360 --> 00:11:58.190 not as an ecosystem to nurture. They broke their 00:11:58.190 --> 00:12:00.429 own websites and sacrificed their digital audience 00:12:00.429 --> 00:12:03.490 just to maximize the pain and apply maximum pressure 00:12:03.490 --> 00:12:06.009 on DirecTV in an analog dispute. It was a brutal 00:12:06.009 --> 00:12:07.909 tactic. They eventually reached a deal after 00:12:07.909 --> 00:12:10.309 about 10 days, but it showed how bruising the 00:12:10.309 --> 00:12:12.409 cable business had become, and that bruising 00:12:12.409 --> 00:12:14.419 extended right up into the boardroom. According 00:12:14.419 --> 00:12:17.799 to the source text, 2016 saw a major power struggle 00:12:17.799 --> 00:12:19.940 at the highest levels of the company. Sumner 00:12:19.940 --> 00:12:22.679 Redstone and his daughter, Shuri Redstone, initiated 00:12:22.679 --> 00:12:25.179 a leadership shakeup, ultimately ousting the 00:12:25.179 --> 00:12:28.500 longtime CEO, Philippe Daumann, following a highly 00:12:28.500 --> 00:12:31.100 publicized settlement process. By the end of 00:12:31.100 --> 00:12:32.960 that year, the board had installed Bob Bakish 00:12:32.960 --> 00:12:36.340 as the new permanent CEO. Bakish stepped into 00:12:36.340 --> 00:12:39.409 the top job. evaluates the landscape, and realizes 00:12:39.409 --> 00:12:42.350 Viacom has a structural problem. They have way 00:12:42.350 --> 00:12:45.110 too many secondary channels in an era where consumers 00:12:45.110 --> 00:12:47.450 are watching less traditional television overall. 00:12:48.009 --> 00:12:50.600 So he implements a survival strategy. Backish 00:12:50.600 --> 00:12:52.980 introduced what he called the flagship strategy. 00:12:53.179 --> 00:12:55.620 It was a necessary pivot to focus their resources. 00:12:56.019 --> 00:12:59.220 He took Viacom's sprawling portfolio and ruthlessly 00:12:59.220 --> 00:13:02.039 prioritized just six core brands, Paramount Pictures, 00:13:02.299 --> 00:13:04.759 B a T, Comedy Central, Nickelodeon, Nick Jr. 00:13:04.799 --> 00:13:07.100 and MTV. Everything else was secondary. Right. 00:13:07.200 --> 00:13:09.700 To solidify this focus, he even took Spike TV, 00:13:09.860 --> 00:13:11.700 a channel that had been around for years, and 00:13:11.700 --> 00:13:13.960 entirely rebranded it into the Paramount network 00:13:13.960 --> 00:13:16.480 to align with the film studio's prestige and 00:13:16.480 --> 00:13:18.899 focus on premium scripted content. It was all 00:13:18.899 --> 00:13:22.120 about consolidation. But even with that renewed 00:13:22.120 --> 00:13:25.279 focus, the landscape was changing faster than 00:13:25.279 --> 00:13:28.940 anyone anticipated. Which brings us to part five, 00:13:29.460 --> 00:13:32.539 the inevitable reunion. As we move into the late 00:13:32.539 --> 00:13:35.870 2010s. Viacom is once again desperately trying 00:13:35.870 --> 00:13:38.850 to capture the elusive younger Gen Z audience. 00:13:39.169 --> 00:13:41.149 They recognize that traditional linear cable 00:13:41.149 --> 00:13:43.210 wasn't going to reach the newest generation of 00:13:43.210 --> 00:13:45.789 viewers, so they launched Viacom Digital Studios 00:13:45.789 --> 00:13:48.769 to create content specifically tailored for social 00:13:48.769 --> 00:13:51.629 platforms. They also bought VidCon, the prominent 00:13:51.629 --> 00:13:54.190 internet video convention, to physically plant 00:13:54.190 --> 00:13:56.750 a flag where youth culture and digital creators 00:13:56.750 --> 00:13:59.500 gathered. And the valuations during this specific 00:13:59.500 --> 00:14:02.360 period perfectly illustrate the digital media 00:14:02.360 --> 00:14:06.519 bubble of the late 2010s. In 2018, Viacom bought 00:14:06.519 --> 00:14:08.940 a digital media company called Awesomeness TV 00:14:08.940 --> 00:14:12.080 for a mere $25 million. To put that in perspective 00:14:12.080 --> 00:14:14.379 just a couple of years earlier, that exact same 00:14:14.379 --> 00:14:17.120 company had been valued at $650 million. It's 00:14:17.120 --> 00:14:20.019 a staggering drop. But Viacom kept pushing forward 00:14:20.019 --> 00:14:22.700 with digital acquisitions. In 2019, they made 00:14:22.700 --> 00:14:25.000 perhaps their most forward -looking digital play. 00:14:25.309 --> 00:14:28.789 They bought Pluto TV, a free ad -supported streaming 00:14:28.789 --> 00:14:33.370 service for $340 million. Purchasing Kudo TV 00:14:33.370 --> 00:14:35.690 finally gave them a meaningful foothold in the 00:14:35.690 --> 00:14:38.409 streaming space. But strategically, it wasn't 00:14:38.409 --> 00:14:41.289 enough to secure their long term future. By 2018, 00:14:41.429 --> 00:14:43.769 the entire media landscape was undergoing rapid 00:14:43.769 --> 00:14:47.009 defensive consolidation. AT &T was in the process 00:14:47.009 --> 00:14:49.409 of buying Time Warner. Disney was swallowing 00:14:49.409 --> 00:14:52.289 up the majority of 21st Century Fox. The giants 00:14:52.289 --> 00:14:55.009 were combining. Exactly. And looming over all 00:14:55.009 --> 00:14:57.629 of this were the tech giants. Netflix and Amazon 00:14:57.629 --> 00:15:00.070 were spending billions on original content and 00:15:00.070 --> 00:15:03.139 dominating subscriber growth. Viacom and CBS, 00:15:03.480 --> 00:15:05.899 even as successful standalone companies, lacked 00:15:05.899 --> 00:15:08.399 the sheer scale required to compete against these 00:15:08.399 --> 00:15:11.600 new megacorporations. The financial logic dictated 00:15:11.600 --> 00:15:13.659 that they needed to merge back together simply 00:15:13.659 --> 00:15:16.059 to survive the transition to streaming. Here's 00:15:16.059 --> 00:15:18.139 where it gets really interesting. Because the 00:15:18.139 --> 00:15:20.840 resistance to this reunion came from the very 00:15:20.840 --> 00:15:25.240 top of CBS. The CEO, Les Moonves, vehemently 00:15:25.240 --> 00:15:28.299 opposed merging back with Viacom. He was incredibly 00:15:28.299 --> 00:15:30.799 vocal about his opposition, famously referring 00:15:30.799 --> 00:15:33.620 to the Viacom cable channels as an albatross 00:15:33.620 --> 00:15:35.820 around the neck of the media industry. And there's 00:15:35.820 --> 00:15:39.700 a deep irony here. Back in 2005, CBS was considered 00:15:39.700 --> 00:15:43.340 the slow, legacy, dividend -paying stock, while 00:15:43.340 --> 00:15:46.730 Viacom was the celebrated growth engine. Now, 00:15:46.889 --> 00:15:49.549 13 years later, the roles were entirely reversed 00:15:49.549 --> 00:15:51.929 in the eyes of CBS leadership. It's crazy how 00:15:51.929 --> 00:15:54.809 fast that flipped. Moonves firmly believed CBS 00:15:54.809 --> 00:15:57.090 was stronger on its own, particularly as they 00:15:57.090 --> 00:15:59.470 were successfully building out their own proprietary 00:15:59.470 --> 00:16:02.230 streaming service, CBS All Access. He fought 00:16:02.230 --> 00:16:04.669 the proposed merger aggressively. At one point, 00:16:04.789 --> 00:16:07.590 CBS made a lowball all stock offer for Viacom 00:16:07.590 --> 00:16:09.409 that was practically designed to be rejected 00:16:09.409 --> 00:16:11.570 by the board. The conflict escalated to the courts, 00:16:11.750 --> 00:16:13.909 with CBS actually suing its own parent company, 00:16:13.970 --> 00:16:17.100 National Amusements. redstone of abusing her 00:16:17.100 --> 00:16:19.419 voting power to force a merger that the independent 00:16:19.419 --> 00:16:22.320 CBS board members did not want. It was corporate 00:16:22.320 --> 00:16:25.360 warfare, but then the entire dynamic shifted 00:16:25.360 --> 00:16:27.919 abruptly. The source text notes that on September 00:16:27.919 --> 00:16:31.740 9th, 2018, Lismoon of his left CBS after being 00:16:31.740 --> 00:16:34.740 accused of sexual assault by 12 women from a 00:16:34.740 --> 00:16:37.000 strictly corporate governance timeline. As outlined 00:16:37.000 --> 00:16:39.360 in our source, his departure effectively removed 00:16:39.360 --> 00:16:41.899 the primary and most powerful roadblock to the 00:16:41.899 --> 00:16:43.980 consolidation of the two companies. With the 00:16:43.980 --> 00:16:46.320 leadership resistance removed, the path was clear, 00:16:46.620 --> 00:16:49.019 and the undeniable financial necessity of gaining 00:16:49.019 --> 00:16:52.799 scale took over. In August 2019, CBS officially 00:16:52.799 --> 00:16:55.519 announced that it would acquire Viacom in a deal 00:16:55.519 --> 00:16:59.120 valued at up to $15 .4 billion. And so the circle 00:16:59.120 --> 00:17:02.460 closes. On December 4, 2019, exactly 14 years 00:17:02.460 --> 00:17:04.380 after they were split apart, the two companies 00:17:04.380 --> 00:17:06.740 officially re -emerged into a single entity called 00:17:06.740 --> 00:17:09.980 Viacom CBS, which, as we know, later rebranded 00:17:09.980 --> 00:17:12.490 as Paramount Global. Bob Bakish took the reins 00:17:12.490 --> 00:17:14.990 as CEO of the combined company, and Sherry Redstone 00:17:14.990 --> 00:17:17.930 assumed the role of chairwoman. It is a remarkable 00:17:17.930 --> 00:17:21.250 narrative arc. You have a sprawling conglomerate 00:17:21.250 --> 00:17:23.769 that fractured itself to maximize shareholder 00:17:23.769 --> 00:17:26.089 value in the golden age of cable, went through 00:17:26.089 --> 00:17:28.369 a chaotic adolescence trying to understand and 00:17:28.369 --> 00:17:30.529 control the Internet, and finally had to stitch 00:17:30.529 --> 00:17:33.210 itself back together just to build enough scale 00:17:33.210 --> 00:17:36.410 to survive the dawn of the streaming wars. And 00:17:36.410 --> 00:17:38.289 that brings us to the end of our timeline. So 00:17:38.289 --> 00:17:40.190 I want to bring this right back to you. listening 00:17:40.190 --> 00:17:44.059 right now. Why does a deep dive into mid -2000s 00:17:44.059 --> 00:17:46.500 corporate boardrooms and multi -billion dollar 00:17:46.500 --> 00:17:49.720 mergers actually matter to your daily life? Because 00:17:49.720 --> 00:17:51.880 the apps that are preloaded on your smart TV, 00:17:52.240 --> 00:17:54.079 the shows that get cancelled or renewed, and 00:17:54.079 --> 00:17:55.960 the media conglomerates that are currently fighting 00:17:55.960 --> 00:17:57.480 tooth and nail for your monthly subscription 00:17:57.480 --> 00:17:59.779 dollars, all of that is the direct, tangible 00:17:59.779 --> 00:18:02.539 result of these corporate chess games. When Viacom 00:18:02.539 --> 00:18:04.940 bought Neopets, sued YouTube, pulled channels 00:18:04.940 --> 00:18:08.119 from DirecTV, or acquired Pluto TV, they were 00:18:08.119 --> 00:18:10.680 shaping the exact media landscape you are navigating. 00:18:10.539 --> 00:18:13.759 So what does this all mean? This raises an important 00:18:13.759 --> 00:18:16.920 question. Think about the incredible life cycle 00:18:16.920 --> 00:18:21.329 we just explored. Viacom split in 2005 to maximize 00:18:21.329 --> 00:18:24.390 profits in the cable era, only to desperately 00:18:24.390 --> 00:18:27.230 fuse back together 14 years later to survive 00:18:27.230 --> 00:18:30.150 the streaming era. It makes you wonder as entirely 00:18:30.150 --> 00:18:33.130 new disruptive forces, like artificial intelligence, 00:18:33.650 --> 00:18:35.950 begin to fundamentally reshape the economy and 00:18:35.950 --> 00:18:39.029 how content is generated, which of today's seemingly 00:18:39.029 --> 00:18:41.849 invincible tech giants will be forced to fracture 00:18:41.849 --> 00:18:44.509 or swallow each other whole just to survive the 00:18:44.509 --> 00:18:46.829 next decade. That is a fascinating thought to 00:18:46.829 --> 00:18:49.359 leave on. The apex predators of today might just 00:18:49.359 --> 00:18:51.519 be the acquisition targets of tomorrow. Thank 00:18:51.519 --> 00:18:53.299 you for joining us on this deep dive into the 00:18:53.299 --> 00:18:55.559 history of ICOM. We invite you to keep questioning 00:18:55.559 --> 00:18:58.059 the forces, the lawsuits, and the mergers that 00:18:58.059 --> 00:19:00.380 are quietly shaping the information and entertainment 00:19:00.380 --> 00:19:01.099 all around you.