Viacom will buy Pluto TV streaming service for $340 million

(Reuters) - Viacom Inc said on Tuesday it will buy Pluto TV, a free video streaming TV service, for $340 million in cash to expand its advanced advertising business.

The owner of MTV Networks and Nickelodeon sees the purchase of the six-year-old company as another way to build a so-called direct-to-consumer business, Viacom said, while avoiding the capital intensive task of competing directly against subscription video services owned or to be built by Netflix Inc, Walt Disney Co and AT&T Inc's WarnerMedia.

Viacom's moves reflect a rekindled interest in advertising supported digital media kicked off by Roku, a device maker that helped viewers stream online videos on TVs that was spun off from Netflix. Amazon has also launched a free TV service recently.

Pluto TV claims 12 million monthly active users and licenses programming from 130 film and TV partners, including Viacom.

It is available on devices made by Roku Inc , Amazon.com Inc, Sony Corp and Apple Inc. The app is also available on smart televisions from Samsung and Vizio.

Viacom said it sees Pluto TV as an important outlet for it to sell advanced advertising that has the ability to target viewers based on their habits.

While Viacom has no plans to make current shows on pay TV services available for free on the service, it sees Pluto TV as a way to make money off its archives.

(Reporting by Kenneth Li; Editing by Sonya Hepinstall)