ViacomCBS Decides to License Content to Rival Peacock: 3 Takeaways

With nothing more than a passing glance, the agreement isn't terribly interesting. NBCUniversal's Peacock streaming service slated to launch in the middle of this month needs video entertainment content -- ViacomCBS (NASDAQ: VIAC) (NASDAQ: VIAC.A) has it.

A more scrutinizing look at the deal, however, raises questions. Namely, why is the owner of CBS as well as movie studio Paramount helping NBC and Universal, respectively, establish Peacock when Viacom already operates a similar streaming service called CBS All Access? Sure, NBCUniversal is paying licensing fees, but all deals impose some sort of trade-off. Viacom may ultimately be short-changing itself by losing exclusive access to some of its own content.

A deeper dive into the matter leads investors to three conclusions, two of which make perfect sense given each company's particular strategy. The third suggests Comcast (NASDAQ: CMCSA), which owns NBCUniversal, may already be winning a war it's not even fighting.

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Source Fool.com