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Paramount CFO Says Company Won’t Repeat ‘Yellowstone’ Mistake

Matt Tamanini

One of the ways that media companies can get instant value out of their recently launched streaming services is by bringing their legacy content from broadcast, cable, and cinemas to the platforms. Before Paramount (then ViacomCBS) launched Paramount+ (originally [CBS All-Access]), they sold the streaming rights to Paramount Network drama “Yellowstone,” which went on to become the most popular show in all of cable.

However, instead of having kept the content in-house, and capitalizing on the show’s traditional success, Paramount has to watch Peacock make the show a cornerstone of its fledgling streaming service for NBCUniversal. Now that Paramount+ is flexing its own streaming muscles, Paramount Global’s executive VP and CFO Naveen Chopra said that the company won’t be making a similar mistake again.

“We’re no longer licensing big franchise IP to third parties,” he said on Thursday as part of MoffetNathanson’s 9th annual Media and Communications Summit. “Back in the day, when Paramount didn’t have its own streaming service, that was the best way to monetize content. Today, that doesn’t necessarily make sense.”

The main strength that Paramount has attempted to capitalize on as it has grown its streaming service is the breadth and depth of content that is created across the numerous arms of the company. As their direct-to-consumer (DTC) offering continues to gain market share and credibility, the studio no longer needs to rely on outside partners in order to make money off of the content created in-house.

By being an additional outlet for CBS, cable, and movie properties to live, Paramount+ doesn’t need to keep its proverbial shelves stocked with billions of dollars worth of original programming, making it a far more profitable investment than many of its competitors. This direct partnership between linear and streaming also allows shows to build an audience that will only benefit the performance of the properties across platforms.

“When we make content investments, we are focused on investing in things that can be utilized across our different businesses,” Chopra said. “It’s not just linear or just streaming. And that’s really important because that allows us to build the business in a way that we don’t have a streaming service that is entirely dependent on expensive exclusive originals. It also means that the traditional side of the business can benefit from reduced content investment as audience behavior continues to evolve.”

While the “Yellowstone”/Peacock situation has confused viewers who naturally assumed that the biggest hit on the Paramount Network would be streaming on Paramount+, Chopra said that the issue has already led to changes in how they handle streaming deals for popular programs.

Related: Why Paramount is Moving 'Yellowstone' Spinoff '6666' from Streaming to Cable

“Take a show like ‘Evil,’ which … did its first season on CBS, [and] was actually then licensed externally to some third-party streamers,” he said. “Then we brought it back to Paramount+ for Season 2, and again, it brought that audience with it, grew its audience, and has performed very well from both an engagement and acquisition perspective on Paramount+.”

Ultimately, this is a major feature around which Paramount’s brass is developing the company’s streaming strategy. Netflix has struggled to keep customers engaged with its content, because without existing intellectual property, every new launch has to build its own audience. When a streamer works hand-in-hand with the most-watched TV network, multiple cable channels, and a global movie studio, the corporate synergy of decades of content can be incredibly beneficial.

“It’s that ability to move content through these different parts of the business, to generate revenue across multiple platforms, across multiple windows, that makes the whole economic model work,” Chopra said “rather than trying to … say we’re going to spend X amount on streaming, X amount on linear. We want stuff that can travel across all these platforms.”

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