“We have set in motion a virtuous cycle,” said board chair Shari Redstone, who made her entrance in a pre-recorded segment that saw her and CEO Bob Bakish arrive in the Bumblebee Camaro from “Transformers” after fighting off evil robots. “Our legacy business powers our transformation, and transformation enhances and expands our legacy.” This is the second time that Redstone’s company has changed its name in two years, but it was all part of the day’s 2 1/2-hour bid to convince Wall Street that it stands a chance in the streaming wars even as it fights for last place among its peers.
Paramount Global has big ambitions for the years ahead, but there’s four key factors that will determine its success.
After beating expectations, it must do so again and again
Tuesday marked the first time that executives broke down subscriber numbers for Paramount Global’s streaming services: Paramount+ had 32.8 million subscribers at the end of last year, putting the service two years ahead of its growth goals — and ahead of Peacock, its last-place rival. Paramount+ now aims for 100 million subscribers by 2024, where it once hoped for 65 million-75 million. The company had to expand its ambitions as it tries to catch up with rivals who launched months or years earlier. Last quarter, Paramount+ added more subscribers than HBO Max, but WarnerMedia has 73.8 million subscribers between HBO and HBO Max. It’s still leagues away from Netflix (222 million) and Disney+ (129.8 million). It’s unclear if Peacock or Paramount+ is in the lead; Comcast likes to cherrypick its numbers. That service now has 24.5 million monthly active accounts between its free and paid tiers, which come via direct sign ups or through a bundle. According to Comcast’s earnings call last month, Peacock also has 9 million paid subscribers and 7 million subscribers who receive the premium tier through cable or cellphone bundles.
Kids’ content is of “enormous” importance
“SpongeBob SquarePants” is Paramount+’s most-watched show; “PAW Patrol” is number four. “iCarly,” “PAW Patrol: The Movie,” and “SpongeBob SquarePants: Sponge on the Run” are three of the top titles that drive new subscribers, according to the company. Nickelodeon content is some of the service’s biggest performers; it also keeps customers locked into subscriptions. “Once families subscribe, they stay subscribed,” said Brian Robbins, chief content officer of movies, kids, and family for Paramount+. “Viewers who come in for kids and family content reduce churn by double digits, creating even stronger long-term value. With 25 million U.S. homes with kids 2-11 and millions more globally, and Paramount+ being one of the top providers of kids’ content — well, from where we sit the upside is enormous.”
Churn is the enemy of streaming success and Paramount is investing more to ensure it happens less. Robbins announced three new “character-driven” “SpongeBob” movies that will stream on Paramount+ and a “big theatrical tentpole” that’s “in the works.”
Franchises are a philosophy
At Paramount Global, it’s all about franchises. Bakish seemingly couldn’t overstate the importance of identifying, launching, and nurturing IP. “If you look at the company historically, probably most of that franchise work was done at Nickelodeon,” he said. Now, “what you see is a broader commitment to franchises, including strategies which span theatrical to series … It’s really a philosophical change that connects with a one-company mentality that crosses platforms and feeds streaming.” Here’s what that means: Not only will “Transformers” get a three-picture reboot starring Anthony Ramos, there will be a new animated Nickelodeon series and a theatrical CGI film, too. “Sonic the Hedgehog” character Knuckles, voiced by Idris Elba, is getting a live-action series; a third “Sonic” film is in development. And MTV’s “Jersey Shore” will never die. Paramount+ launched local versions of the reality series for Mexico and Brazil, where they became the number-one series on the service. Seven more versions of “Shore” are coming up.
Legacy is a help and a hindrance
Paramount executives liked to say that Paramount+ has a “differentiated strategy in streaming.” Sounds like spin, but it is different from other conglomerates in its embrace of both subscription streaming (Paramount+) and linear, ad-supported free streaming (Pluto TV). In the U.S. it has NFL football; internationally, it hosts popular soccer leagues. It also reaches across TV, theatrical, and streaming: Paramount+ gets a plug on CBS every hour, for example. Then there’s the legacy drawbacks. Because of a licensing deal signed with EPIX last year, Paramount+ won’t get first dibs on the full Paramount feature slate until 2024. That means Paramount can’t build in a Paramount+ message as they market “SpongeBob” or “Quiet Place” for theatrical release. For now, executives offer the kind of inexact verbiage that’s a marketing nightmare: All those great movies revealed Tuesday? They’ll “make their way to Paramount+,” eventually. Sign Up: Stay on top of the latest breaking film and TV news! Sign up for our Email Newsletters here.
