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ViacomCBS shares fall 18 per cent

By Lawrence Gash

Media conglomerate announces Q4 struggle to adapt to a changing landscape

American media conglomerate ViacomCBS Inc (VIAC) saw its share price plunge by 18 per cent by the end of Thursday trading as it struggles to adapt to a changing media landscape.

The firm reported a net loss of $258m (£199m, €238bn) in the fourth quarter of last year. This was a $1bn drop from the $887m profit it reported in the same period the previous year.

Revenue also suffered, falling 3 per cent to $6.87bn on the year before. While many analysts had predicted a poor fourth quarter, the extent of the losses took investors by surprise, hence the significant sell off.

The merger between the two firms in late 2019 incurred significant costs. However it can be argued that the conglomerate’s problems run much deeper.

As a smaller media firm ViacomCBS has been unwilling to risk the expense of only producing original content for its own streaming service, unlike the far wealthier Apple or Disney.

Instead it has focused on producing hit TV series for other rivals, such as Netlfix, at the same time as slowly strengthening its existing streaming services, CBS All Access and Pluto TV, by unifying the many brands under its umbrella, such as Showtime, Paramount Pictures, VH-1 and Nickelodeon.

ViacomCBS recently released Star Trek: Picard which sees Sir Patrick Stewart return to his iconic role. The show has achieved critical acclaim, with a 90 per cent rating on Rotten Tomatoes. The actual popularity of the series with the public will greater reflect the conglomerate’s chances of surviving the streaming revolution.

ViacomCBS’ CEO Bob Bakish stated: “There may be winners and losers in the space, but we feel good about taking share and getting deals done.”

With the group’s share price falling 30 per cent since its merger and down by as much at 1.30 per cent in pre-market trading, current investors will hope that Bakish’s bullish outlook is eventually vindicated.

FURTHER READING: Netflix share price analysis: Watching the gap

FURTHER READING: Netflix warns of tougher competition in 2020

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