Apr 4, 2019 Streaming Strategy
Tom Ryan Wants to Bring the Lean-Back Experience to Streaming TV
The Pluto CEO and co-founder talks entrepreneurship, leading in a time of transition, and binge-watching.
Our In the Office With ... series, gives Viacom executives the opportunity to reveal a little bit about who they are, how they lead, and what drives them in the day-to-day.
Tom Ryan has just returned from celebrating his 50th birthday with friends in Costa Rica. It was a week-long break from his transition as CEO of a multimillion-dollar start-up to being part of a multibillion-dollar media conglomerate.
Ryan is co-founder and CEO of Pluto TV, the free streaming service that Viacom acquired in January. Now that he’s back, it’s a whirlwind of slick upfront dinners, schmoozing with advertisers and hashing out the details of what Pluto TV will look like post-acquisition.
Ryan has shoulder-length hair, often travels coast-to-coast for business with just a backpack and typically wears jeans and sneakers to work. He has built a deep network of contacts in his 20-plus years starting businesses and investing in others. It’s that bench of associates Ryan asked for support when he and Ilya Pozin co-founded Pluto TV in 2013. Ryan had recently moved to L.A. when he got a call from Pozin, a former business partner, who wanted his opinion on a prototype.
Like many business ideas, it was born from consumer frustration. Pozin was trying to balance work with babysitting his two-year-old daughter, so he figured out a way to have her kid-friendly YouTube videos run without interruption. It seemed like an issue that the ever-growing streaming world ignored—merging the experience and programming of linear TV with a streaming service.
Ryan agreed that Pozin was onto something and together they created Pluto TV. Now Ryan is back and forth between L.A., where Pluto is based, and Viacom’s Manhattan headquarters, as the teams flesh out what the new Pluto will look like. Things are moving fast. In February, Viacom announced plans to expand Pluto into Latin America later this year.
Ryan recently chatted with me from Viacom’s executive dining room about Pluto’s future, leading during a time of transition, and what he likes to watch on Pluto TV.
Tara Weiss: What was the first business you ever started?
Tom Ryan: An early digital music company called Cductive. We started it in 1996 and were acquired by our main rival eMusic in 1999. We aggregated exclusive rights to a few hundred independent record label catalogs and sold the music online first as custom CDs—make your own, track by track, and we would send it to you in the mail, which sounds prehistoric now—and then as one of the first mp3 retailers selling 99-cent downloads.
TW: When it came to Pluto, why did you believe a free, ad-supported service had potential despite critics?
TR: There was and is a real customer need. It's not just about taking on-demand videos and making them linear. It's really about trying to solve this paradox of choice for consumers. There are so many videos out there but it's tough to find the good stuff. You don't want to do that work yourself, nor do you want to have to deejay your way through those videos one by one. We proved the customer need when we curated YouTube videos in the very early days. We continue to prove this now with premium TV shows and movies.
"It's not just about taking on-demand videos and making them linear. It's really about trying to solve this paradox of choice for consumers."
TW: True, but it’s become a very crowded marketplace. How does Pluto fit into the landscape?
TR: For the streaming portion of their television viewing, consumers are creating their own bundles, but I think there's fatigue among consumers about how many subscriptions they'll actually pay for. So where Pluto comes in, is it provides you with 100-plus, highly curated, live channels that go very broad and very deep, with thousands of TV shows and hit movies offered on an on-demand basis in what feels like a traditional TV experience.
Pluto got a huge head start. When we made a big bet on ad-supported linear, everyone was running to SVOD products. The landscape is getting very crowded, but the learning curve will be steep for competitors, especially now that we have Viacom backing us.
TW: And that’s what sets you apart and enables you to be competitive?
TR: Certainly, but we are not complacent. We lead with linear. That was an early and seemingly contrarian bet we made, that as TV moved to the internet it would not be all on-demand. You look at all the AVOD players out there today and there's no one of scale that looks like Pluto TV. Everyone else has essentially a menu of on-demand free movies. They’re like a free version of Netflix.
Second, Pluto is increasingly being built into different major players. Not just smart TVs like VIZIO and Samsung, which is tens of millions of devices in the U.S. alone by next quarter, but we're built in now to a live channels feature on Amazon Fire TV. We've built Pluto in as the default TV service on Microsoft's MSN. We’re taking what we do and enabling other large players, whether they're hardware or software companies to be in the free streaming TV business.
It’s a big advantage and it creates a competitive moat. Otherwise you're duking it out in the app store with everybody. And we duke it out pretty successfully, but you're still only as good as your next chart position the next day.
Small Talk
Most recent TV show addiction: Billions. And Black Mirror—it’s dark but it's good.
Travel must-have: This amazing backpack that I backed on Kickstarter called The Everyday Backpack by Peak Design. It's made for photographers, but you can really use it for anything.
High school clique: Nerd, slash wanna-be jock. I was very studious and focused on academics, but I also tried to perform at sports. I was cut from the football team. I was basically on the swimming team and golf team.
TW: Some of Pluto’s channels are incredibly obscure. What are the most popular channels on Pluto and do any of them surprise you?
TR: What you see as incredibly obscure, we see as a huge under served opportunity. In our top 10 channels, three of them that are single show channels like the Cold Case Files channel. The Hell's Kitchen channel. And River Monsters. They're channels that superserve the customer. We did a pop-up channel that's temporary for Wahlburgers (a reality show about the Wahlburg’s family restaurant chain) last week.
TW: Now that Pluto’s been acquired, is it hard to give up total control of your company?
TR: That's one of the big questions whenever you consider selling a business. But I think all of the ways in which Viacom helps accelerate Pluto make for a really exciting future. One of the greatest fears you have as an entrepreneur selling your business is that it gets acquired, and then it gets put in a corner somewhere and it kind of just wilts on the vine.
It became very clear that Bob [Bakish] and Wade [Davis] and all of the others that helped us bring this deal to fruition want to make this a multi-billion dollar opportunity and believe in Pluto becoming the leader in free-streaming television globally. That alignment of vision, and seeing just how much emphasis and priority is being put on Pluto from the top of the organization is about the best possible feeling you can have as an entrepreneur who's selling their company.
TW: Obviously there’s lot of opportunity but there’s also uncertainty. How do you lead your team during this time of transition?
TR: In much the same way I led them before. I've got an extremely talented but relatively small team. I'm a big believer that if you have a very small but focused team that buys into the mission and comes to work every day with a singular focus on achieving that mission, that you can do really great things that big companies can't even do. So I keep the team focused on our mission. Our mission has not changed. We're here to entertain the planet.
"There were many quarters when we were flying with one engine, and obviously, as the pilot, that's a very unnerving position to be in."
TW: I read an interview where you said there were quarters where you questioned whether the company had a future. Why did you stick with it during the tough times?
TR: When you're CEO, profit, performance and a duty to investors is critical. At a certain point, though, if something's futile, then you're wasting yours and your team's time. I always felt that there was a need for a product like this. And even if we hadn't hit our stride, at the time, that we had enough capital to continue iterating and to finally find that stride.
Then the market turned our way. About a year and a half ago we really saw a migration to connected TV. And that's where people watch for long periods of time. That's where the TV dollars want to be. And that's where the real revenue per hour, per user, starts to add up.
The way I talk about it with our team, is we built a plane and we have a dozen engines on that plane, which sounds great. But for a while, only one of those engines was firing. But better content begets more viewership, so as long as you've got the ability to sell ads on that platform and as long as you can acquire users on that platform, then you can invest in more content and marketing and so on. And the engine starts to spin. But, there were many quarters when we were flying with one engine, and obviously, as the pilot, that's a very unnerving position to be in.
In the end, every business is only as good as their team and our team really produced. With this acquisition, all engines are firing and we are taking this plane around the globe.
