Paramount+ Defends Unique Streaming Strategy, Changes Movie Release Frequency

In lieu of a traditional earnings call, last month Viacom/CBS rechristened itself simply as Paramount and held a multimedia presentation that focused heavily on its still-growing Paramount+ streaming service. Despite painting an incredibly positive picture of the platform’s future, the company saw its stock tumble due in no small part to the streamer’s increasing financial investment in content and unusual approach to the industry.

On Tuesday at the Morgan Stanley Technology, Media, and Telecom Conference, Paramount CEO Bob Bakish responded to concerns over the company’s plans speaking directly to Wall Street saying, “We didn’t necessarily get the market reaction we would have hoped for … We are going to have to prove that to you over time.”

Bakish reiterated that the fourth quarter of 2021 was successful for both the company’s free and paid streaming services. The company announced at their Investor Day that Paramount+ had eclipsed 32.8 million subscribers by the end of last year. The exec touted an addition of 10 million monthly active users on the company’s free ad-supported TV service Pluto TV and another 9.4 million paid subscribers to Paramount+. The increases bring Pluto TV up to over 64 million users and Bakish said that the company has raised their projections to anticipate having over 100 million Paramount+ subscribers by year’s end.

What Paramount believes is propelling their growth is the diversification of content that they are uniquely positioned to exploit. Bakish said that there are four key dimensions to the company’s streaming differentiation amongst its competitors.

The first is that the company’s content strategy is unique as they are making substantial investments across a wide swath of content areas. While nearly all streamers boast a variety of content, Paramount+ is focusing heavily on everything from sports to kids’ content to international sports to movies, TV, and more.

The CEO also touted Paramount’s multi-pronged approach to streaming by providing both FAST and subscription-based options to consumers. Not only does Paramount own Paramount+, but they also offer a streaming subscription for Showtime. “We are really both the market leader in FAST, and we have a pay product,” Bakish said. “And so that combination means that we have a larger revenue pool we can go after, that combines advertising and streaming.”

At the presentation last month, Paramount announced that they would begin integrating the Paramount+ and Showtime apps to allow subscribers to access content from both services together and at a discounted rate.

The third differentiation point that Bakish discussed is the fact that Paramount+ is connected to the largest broadcaster in the world and a major, Hollywood studio, meaning that there will always be a steady flow of diversified content coming to the platform.

This dovetails nicely into his fourth differentiator. Bakish noted that while other platforms are continually looking to license international content, Paramount has the advantage of being ahead of the game in terms of owning and creating TV and movies across the globe that can live on the streamer. Not only will that make the international rollout of Paramount+ more attractive in non-U.S. markets, but it opens them up to further distribution deals around the world as well.

“We have long been a global operating company,” Bakish said. “We have teams on the ground in 30 markets. We have 12 studios creating content locally around the world. And we have really breadth of partnerships that we can bring to bear to accelerate our streaming strategy and provide new forms of value, and you see that in some of the distribution deals we’ve announced recently, with the likes of Sky and CANAL+.”

Despite the CEO’s belief in the streamer’s strategy, he did seem to concede that the aggressive content creation strategy that they had originally planned for might be cost-prohibitive, especially given the stock market’s reaction to the streamer’s approach.

“One of the things I said early in the year was I thought we would have a movie a week on Paramount+ by the time we got to ‘22, mid-22. We won’t,” Bakish said. “We’ll have probably one every other week. We think that’s a better investment strategy, and we mix some of that money over to the series side.”

Bakish noted that in addition to investing original series exclusively for Paramount+, like “1883” and “Mayor of Kingstown,” they had moved two shows “Evil” and “SEAL Team” from CBS over to the streamer. He noted that the linear success of the latter two shows has proven to be a boon for subscriber acquisition and engagement on the Paramount+ front since the move.