ViacomCBS Doubles Down On Paramount Brand, DTC Future

ViacomCBS has declared that every corner of the mid-major media company is focusing on maximizing its streaming future. 

“This is a time characterized by great momentum and tremendous go-forward opportunity,” CEO Bob Bakish said at the end of a nearly two-hour-long investor presentation, followed by 30 minutes of analyst Q&A on Tuesday afternoon.  “Our momentum is building and as it grows, as we take Paramount Plus and our other streaming businesses to the next level, the size of the opportunity we see ahead is matched only by the scale of our ambition to seize it.”

Among the news out of the presentation: 

• ViacomCBS will rename itself Paramount Global “or simply, Paramount,” said company chair Shari Redstone. “We want you to take note of the extraordinary progress we have made over the past two years in all the momentum we have gathered, and know that there is no higher priority for us, and no higher priority for me, than unlocking and maximizing value for all of our shareholders.” The company's various share types will trade on Nasdaq under the tickers PARAA (Class A common), PARA (Class B common) and PARAP (Preferred Stock) beginning Thursday morning.

• The company raised targets for both its ad-supported and subscription streaming operations, primarily hybrid SVOD service Paramount Plus and FAST platform Pluto.TV, given how quickly it is reaching previous targets, executives said. Instead of 65 million to 75 million streaming customers by the end of 2024, the company now expects to top 100 million by then, up roughly half. The company is also raising its direct-to-consumer revenue goals from $6 billion to $9 billion a year. 

• The new subscriber targets don’t include “many millions” of expected additional subscribers through its previously announced partnership with Comcast  to launch a new European service called SkyShowtime later this year, Bakish said. The Canal+ deal is only part of this year’s expansions into major European territories, part of 60 territories where it plans to launch in the coming year. 

• Announced a deal with Canal+ Group to bundle Paramount Plus with the French media giant’s offerings in its home country. The “hard bundle,” similar to its deal with T-Mobile in the United States, will drive immediate scale and market penetration for the service when it launches in France, company executives said. 

• The company will rejigger its financial reporting to better allocate expenses and track subscriber additions for its direct-to-consumer operations, primarily Pluto and Paramount Plus. Other media companies have been slow to provide such granular  detail about their streaming operations, to the chagrin of analysts and investors.

• Given changes in the way it is allocating costs across different distribution platforms, it would have seen a loss of $2.2 billion in 2021 for its DTC streaming efforts, said CFO Naveen Chopra, and $1 billion in 2020, before Paramount Plus launched. Those losses will likely continue for another year before moderating as the company continues to grow, “repatriate” crucial franchise library material from licenses, and create new content. Chopra said the company has substantially paid down debt and should have no issues shouldering the losses during the transition. 

• A new bundle of Paramount Plus and the streaming version of its premium cable network Showtime is on the way, designed to make it easier for consumers to use. The bundles will cost $11.99/month for Showtime and the basic Paramount Plus tier, $14.99/month for the ad-free tier. The company also will integrate access to Showtime directly in the interface of Paramount Plus, something Disney has started to do with Hulu and Hotstar bundles with ESPN Plus and Disney Plus. The new bundle would also have a single sign-on and other customer-friendly components. 

• Showcased new series, sequels, spinoffs, crossover movies, and related casting and new-season announcements for a swathe of franchises from Star Trek to Transformers  to Blue’s Clues to Beavis & Butthead. In many cases, the content announcements were presented by top talent such as Tom Cruise (the next two Mission:Impossible films), John Krasinski (A Quiet Place III), J.J. Abrams (the next Star Trek movie) and Taylor Sheridan (Yellowstone/1883 spinoffs)."On Paramount+, we have something for everyone," said Chief Programming Officer, Streaming Tanya Giles. "We are taking our broad content offering and deepening it with more content in key categories, building on our treasure trove of IP to create lasting, hit franchises."

The company’s strategy is clear: milk strong franchises with spinoffs, reboots, sequels and cross-platform approaches that dive deeper into known quantities, or new kinds of shows from star talent and creators. 

That strategy means, for instance, that Paramount will work with Sega to produce a second Sonic the Hedgehog movie, to be voiced by Idris Elba, and to quickly follow it with an ongoing streaming series for Paramount Plus. 

The blizzard of announcements across the “mountain of entertainment” was puffed up in part by content that the company has made but doesn’t currently control, thanks to previous licensing deals. 

That includes notables such as more than 300 episodes of South Park, now available on competitor HBO Max, though creators Trey Parker and Matt Stone are making two feature-length South Park movies a year for the next six years that will run on Paramount Plus first. The deal with HBO Max will end by 2025, returning the episodes to Paramount Plus. But there’s a plan for that too: All feature-length projects will end up on Paramount Plus by 2024, though some will get a theatrical release before going to the SVOD service in the Pay One distribution window. 

All told, it represents one of the most significant expressions of a DTC, streaming-first mentality by any of Hollywood’s major media companies. Given Paramount’s scale compared to true giants such as Apple, Amazon, Disney and Netflix, wringing opportunity out of every corner of its library and content spend will be vital as long as Firestone continues to keep the company she inherited from her father as an independent operator working among the very large competitors on every flank. 

"We see a huge global opportunity in streaming, a much larger potential market than can be captured by linear TV and film alone," Bakish said. "We're excited about our ability to not just compete, but thrive, creating significant value for both consumers and shareholders. How? Because we're broader in four key areas: our diverse content, streaming model, mix of platforms and global reach. As we look forward, the size of the opportunity we see is matched only by our ambition to seize it."