Viacom Takes A Step Into Its Digital Future

Viacom, Inc. (NASDAQ: VIAB) is betting on its future with an expanding partnership between itself and social media app Snapchat Inc, according to the Wall Street Journal.

The company has been under increased scrutiny in recent months, as cable TV appears to be on the way out due to the rising popularity of online streaming subscriptions. However, the firm is hoping to revive its brands and its bottom line by gaining a foothold in the ever-growing digital media space.

Snapchat Benefits

Viacom's MTV and Comedy Central have already established Snapchat channels in which rapidly changing content is displayed for fans. The partnership is expected to help breathe new life into the Viacom brands, as Snapchat is primarily used by younger people, whose interest in traditional cable has dropped significantly from previous generations.

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Advertising

Now, Viacom is hoping to leverage its relationship with Snapchat in order to increase its bottom line through advertising sales. The two have made a multi-year agreement under which Viacom will be able to sell advertising on behalf of Snapchat. The deal will help Viacom improve its ad sales arm and take some of the spotlight off its weakening TV business. The deal will also give Viacom a chance to expand its MTV and Comedy Central channels in order to reach more users.

Snapchat Expanding

The deal between Snapchat and Viacom is also a benefit to the social media app, which has been in the midst of a transition from a novel disappearing message service to a legitimate source of news and entertainment. The app has been working to transform its business model into one that will provide a steady income stream, and major advertising partnerships is one way to do that.

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