MTV is coming up with new ways to generate more revenue after its parent company recently entered a merger agreement that is still under regulatory scrutiny.
Paramount Global, MTV's parent company, has been struggling with its finances for years due to the decline in cable subscriptions and growing competition among streaming services.
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Most recently, the company was also faced with multiple production stalls because of the Writers Guild of America strike in 2023, which caused the network to lose large amounts of revenue.
In this environment, some of Paramount Global's networks are coming up with innovative ways to generate revenue.
The MTV Video Music Awards (VMAs) is an awards ceremony hosted by MTV that recognizes the year's best music videos. The event is one of the biggest music award ceremonies in the U.S., featuring the industry's top artists through performances and tributes.
Such a big ceremony comes with a heavy price tag, and MTV's latest partnership might be the solution it needs to pay its costly bills.
Merger marks the end of an era
In July of this year, Paramount (PARA) agreed to merge with the media company Skydance.
Paramount owns multiple properties, including CBS and Paramount Pictures, and cable networks like Comedy Central, BET, and MTV.
According to the merger agreement, Class A stockholders will receive $23 per share, and Class B stockholders will receive $15, totaling $4.5 billion in all-stock transactions.
If the transaction closes early next year as expected, the deal still needs to be approved by the Federal Trade Commission; Skydance will own all of Paramount's class A shares and 69% of the outstanding class B shares, making it the majority stakeholder.
According to Paramount, this effort will improve profitability, foster economic stability, and enable future investments in growing digital platforms.
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A similar merger agreement was negotiated back in June, but it fell through at the last minute because Shari Redstone, one of Paramount's longtime owners, reportedly did not want to give up her influence at the company.
MTV VMA turns to AI for monetization
The MTV VMAs isn't a cheap awards show to produce, especially when the event is celebrating its 40th anniversary.
With so many A-list celebrities in one place and MTV left to pay the bills, the network was forced to devise creative ways to profit from the costly celebration.
And it did.
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As its newest revenue generator, Paramount partnered with Shopsense AI, an AI-driven retail media platform, for the 2024 MTV VMAs.
This will mark MTV's first-ever partnership with a retail AI and the first time the VMAs will be fully shoppable.
This new partnership allows viewers to shop the looks worn by their favorite celebrities on the red carpet and at the award show.
To enjoy an uninterrupted viewing experience while shopping, Shopsense activates a second-screen lens that allows viewers to take photos of the outfits worn on screen so they can get the exact fashion item or product recommendations for similar pieces worn.
“Shopsense is creating a truly immersive and interactive experience that seamlessly blends entertainment and commerce. We can't wait to see how our fans embrace this new way to engage with the VMAs and look forward to extending the Shopsense AI Lens to additional Paramount content in the coming weeks and months," said President of Paramount Advertising John Halley in a press release.
The MTV VMAs will be held on Wednesday night and be broadcast by Paramount-affiliated networks.
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