Paramount Agrees to Extended Output Deal with MGM+; Will Pay Amazon to Stream Films on Paramount+ First
The deal will see blockbusters from Paramount continue to stream on MGM+ after their initial viewing period on Paramount+ ends.
Paramount is back in business with MGM+. According to an exclusive report from Deadline, Paramount has agreed to an extension of its output deal with the Amazon-owned MGM+, which will see movies like “Mission: Impossible - Dead Reckoning” head to that premium cable channel and streamer once they finish their term on Paramount+.
- Paramount’s deal with MGM+ was set to expire in December 2023 before the extension.
- Under the terms of the deal, Paramount will pay MGM+ to recapture the Pay 1 window for select titles, allowing them to be available on Paramount+ before anywhere else.
- News of the extension comes as Paramount is facing serious questions about its future as a company.
What Does Extension of Paramount/MGM+ Deal Mean for Viewers?
The deal means that Paramount will continue to send movies to MGM+ once they’ve concluded their Pay 1 windows on Paramount+. The deal was first agreed to in 2021 and was set to expire in December of last year before the extension was agreed to. The extension will cover all Paramount Pictures films released theatrically in 2024 and 2025.
Technically, the agreement is a Pay 1 deal that sends Paramount movies to MGM+ as soon as they leave theaters, but the pact also allows Paramount to pay MGM+ to buy out Pay 1 windows for some of its most popular films, such as the “Mission: Impossible” movies and 2022’s “Top Gun: Maverick.”
Audiences shouldn’t notice much in the way of change under the terms of the extension. All Paramount Pictures films will continue to stream on Paramount+ once they leave theaters, as Paramount announced in 2022 that starting in 2024 all future theatrical releases in the United States will premiere on Paramount+ first once they leave theaters.
Is Extending the Pay 1 Deal with MGM+ Good for Paramount?
On its face, the terms of Paramount’s extended deal with MGM+ are a bit puzzling. It’s hard to see the logic behind selling Pay 1 rights to another streamer, then paying that streamer to reclaim the rights to most of the movies covered under the specifics of the contract between the two. Given that the current deal is an extension of the 2021 agreement, it seems likely that the stipulation requiring Paramount to pay MGM+ for Pay 1 rights is still part of the deal.
However, since this is an extension of the previous deal, and Paramount Global had long ago announced that its flagship streaming service would be the future Pay 1 home for its own movies, the negotiations between Paramount and MGM likely factored in this new reality in a way that was beneficial for all involved. However, since financial terms were not released, it is difficult to determine the financial impact for either side.
It’s possible that Paramount still makes more money than it spends from the MGM+ deal, but it’s a fairly odd arrangement nonetheless. The rise of subscription video streaming platforms and the havoc wrought on theatrical windowing by the COVID-19 pandemic have caused a shift in thinking when it comes to Pay 1 deals; they used to be highly profitable agreements between studios and cable channels that outlined which network got popular movies before anyone else.
Now that most studios have streaming services of their own, most have decided to house their movies on their own streamers. Disney and Warner Bros. Discovery do so, as does NBCUniversal, which licenses its movies to Netflix only after a four-month period of exclusivity on Peacock. This allows customers to know more easily where a movie will stream once it leaves theaters, and it allows studios to help enhance the public profile of their companion streaming services.
Again, it’s not known for sure if Paramount has to continue paying MGM+ for the right to show its own movies on its own streaming platform first under the terms of the recently-agreed-to extension. But it seems likely, and that seems like a questionable management decision for Paramount, a company with a highly uncertain future as things currently stand.
Paramount Plus
Paramount+ is a subscription video streaming service that includes on-demand access to 40,000+ TV show episodes from BET, CBS, Comedy Central, MTV, Nickelodeon, Nick Jr. and more. The lineup includes “1883,” “Tulsa King,” “Star Trek: Discovery,” Nickelodeon’s “SpongeBob SquarePants,” and “PAW Patrol.” Subscribers can watch the NFL, college football, The Masters, college basketball, UEFA Champions League, UEFA Europa, Serie A, and NWSL. The service also offers the option to watch your live CBS affiliate. The upgraded ad-free package includes premium movies and shows from Showtime.