Pluto TV, which recently celebrated its one-decade anniversary, is one of the fastest-growing streaming services in the world.
In 2021, the service reached a major revenue milestone of $1 billion, and this trend has continued for the past two years.
The surprising thing is that Pluto TV is a free service; you don’t need to sign up to watch content. So, how is it possible that a free streaming company can make over $1 billion?
Pluto was launched to curate online content into TV-like channels
To understand Pluto TV’s success, we must return to its beginnings. The streaming platform was launched on April 1, 2014, by Tom Ryan.
The funny thing is that it wasn’t a streaming service then. Instead, it was designed to curate online videos and provide them to viewers in a TV-like format, where they could channel surf.
At the time, Pluto founders saw a niche in online content viewing, as YouTube recommendation algorithms were not advanced, thus making it hard to find content on the platform.
But while they saw an opportunity, many people assumed Pluto was a joke, as Ryan confirmed in an interview with IndieWire.
“We launched on April Fool’s Day in 2014, and lots of people thought we were indeed fools.”
Pluto went into live TV with the hope of monetizing their content
Pluto’s idea for curating online content attracted decent viewership. However, the company used a YouTube API and could not monetize its content then.
This challenge led them to seek out multichannel networks that wanted additional distribution channels outside of YouTube.
Despite not having a large audience or revenue generation, many networks were willing to license their content to Pluto.
Consequently, the outfit was able to move away from its content curation model and started offering premium live TV channels.
By 2017, Pluto TV had amassed an audience base of more than six million monthly viewers.
In that year, the company continued its upward growth trend by offering on-demand content to its users, which only served to attract more viewers.
In 2019, Pluto TV was acquired by Viacom
In 2019, Pluto TV was acquired by Viacom/Paramount in a deal worth $340 million. The company was attracted to Pluto because of the growth potential of the free ad-supported television market (FAST).
Viacom purchased Pluto TV with the intent of monetizing its content through ad-supported streaming. It also wanted to use the outfit to distribute content from its subsidiaries.
The deal helped Pluto TV further accelerate its upward growth. The outfit gained access to a vast amount of Paramount’s premium content, which it could offer on its platform for free.
In addition to the premium content from Paramount, Pluto TV was also a huge beneficiary of the COVID-19 pandemic.
With many people at home and cash-strapped, they turned to Pluto TV for its free premium content, which helped to drive up their viewership numbers.
Pluto TV hit $1 billion in revenue in 2021
Pluto TV’s model of free ad-supported streaming was a huge success in 2019. In 2021, the company reached a major milestone: $1 billion in annual revenue.
The ad-supported model has proved to be a huge success, as the free content attracts more viewers. Therefore, despite not charging for its content, Pluto TV can make a lot of money by showing ads to its audience.
Pluto TV’s growth is expected to continue exponentially
According to GlobalNewswire, Pluto TV is expected to continue its upward growth, reaching a revenue of $4.2 billion in 2028. This comes when several paid, ad-free streaming platforms are making losses.
This is because more and more consumers are leaning towards free or cheaper ad-supported plans. For example, Netflix is making more money on its cheaper ad-supported plan than the standard (and more expensive) ad-free one.
According to Tom Ryan, Pluto TV’s FAST model is universally appealing, and there is much more room for growth.
Therefore, if Pluto can continue on its upward growth, it will continue raking in a lot more revenue despite being completely free.
You can activate Pluto on your favorite streaming device to watch free content.