Why the Future of Streaming Will Look More Like the ‘PAW Patrol’ Movie and Less Like ‘Encanto’

Right now, streaming services are spending billions of dollars to convince you to part with less than $15 per month. That means expensive star-driven Netflix movies like “Red Notice,” special effects bonanzas like “WandaVision,” and intense dramas like “Little Fires Everywhere.” But a new presentation by Paramount suggests a 9-year-old cartoon show might be the key to streaming success.

“PAW Patrol” has been a Nickelodeon mainstay for nearly a decade. The show features various rescue dogs who help people and animals in their town. Toddlers love it. Keep your eyes peeled when walking through Target and you’ll see the show stands atop a mighty merchandising empire. In 2021, Paramount leveraged that popularity with “PAW Patrol: The Movie.” That’s nothing new - cartoons like “Transformers” and “G.I. Joe” got animated theatrical films in the 1980s. But what is new is how Paramount leveraged those pups into far more viewership than you might expect. And it could provide the model for streaming to come.

A Dual Release Strategy

While Paramount is holding back its adult-skewing films with an exclusive theatrical run, the “PAW Patrol” movie hit theaters and Paramount+ on the same day in July 2021. While some streaming companies have struggled with the streaming vs. theatrical equation, Paramount simply decided that family films would stream on the same day they hit theaters. Parents who want to take their kids to the theaters can do so, families who want to save money can plop down on the couch.

This strategy paid off.

The “PAW Patrol” movie became one of the most-watched originals on Paramount+ and generated $40.1 million in domestic theaters with a worldwide gross of $144 million. Not bad for a movie that reportedly cost just $26 million.

What’s remarkable is that the movie pulled that many ticket sales while it was available on Paramount+ for a very low price. And the company noted that the film was its fifth-largest driver of new streaming acquisitions as well.

Let’s contrast this to another film with well-known IP: “The Matrix Resurrections.” Like the Nickelodeon pups, the new Keanu Reeves film was available in theaters and streaming (HBO Max) on the same day, but the math was very different. The Matrix movie cost $190 million and made just $37.6 million domestically and $156 worldwide. Perhaps a sour box office might be worth it if it drove streaming subscriptions, but we don’t have any evidence that was the case.

According to Antenna Analytics, the release of “PAW Patrol: The Movie” drove subscriptions similar to those Peacock acquired via the Tokyo Olympics and HBO Max got for the “Friends” reunion special.

The pups of “PAW Patrol” proved that content can perform well theatrically and via streaming, even if it’s cheap.

Riding The Wave

Today, Paramount+ chief Brian Robbins said that after the “PAW Patrol” movie came out, streams of the TV series on Paramount+ grew 75%. Even more impressive? Ratings for linear episodes doubled.

With one $26 million movie, Paramount entertained audiences in theaters, kept families happy at home, and breathed new life into archival streaming episodes of its shows and the day-to-day ratings on Nickelodeon.

Aside from celebrity cameos and slightly better animation, the film is no different from the regular half-hour animated adventures. Rival streaming companies must see this and seethe with jealousy.

The Future, for Better or Worse

With a staggering success like this, Paramount is doubling down on the strategy. Today, the company announced an upcoming movie based on “Blue’s Clues.” If the company sees solid box office, increased sign-ups, and higher viewership on linear and in the streaming archive, there’s no telling how many of these films we might see.

Contrast this strategy to Disney+. That’s another service packed with beloved family franchises. But Disney pivoted away from its Premier Access “day and date” streaming strategy for its Marvel films. Now, those big movies get a full run in the theater before hitting streaming. And Pixar movies are going straight to Disney+ without the chance to play on the big screen. “Soul,” “Luca,” and “Turning Red” have gone directly to home viewers. Non-Pixar “Encanto” got a theatrical run and has since turned into a streaming hit. Each of those films is original, requiring talented writers and the world’s best animators. The “PAW Patrol” team can knock out another adventure in their sleep.

Disney would also struggle with the Paramount strategy because Disney is primarily about movies first, spin-off TV series second. Perhaps if “Moon Knight” or “Daredevil” perform well, we might get a big-screen adventure from those small-screen heroes. But even then, Disney won’t air those programs on a linear network. And even if a filmgoer wanted to revisit the short-form adventures, they’d only find one season of “Moon Knight” and three seasons of “Daredevil.” Paramount+ offers six “PAW Patrol” seasons of 24 episodes each.

You won’t see Netflix turn “Squid Game” into a movie. HBO Max tried reviving “The Sopranos” with “The Many Saints of Newark,” and that sold just $12 million in tickets worldwide.

The terrifying lesson to streamers is not to try too hard, just reheat a cheap, existing property and blast it out across your media ecosystem. Time will tell if this is simply a shortcut to growth for Paramount or whether the magic may fade. But for now, the release strategy of that little animated movie looks like one of the smartest media decisions in the last 12 months.

Every streaming service may want to win the Oscar, but publicly traded companies may be more interested in rewarding the shareholder.