Paramount Exec: Content Spending is in a Correction as Costs Go Up; What Does That Mean for Future of Streaming TV?
Leaner times may be ahead for Paramount+. At the Edinburgh TV Festival, Paramount+ chairman and CEO David Nevins was not shy about his company’s struggles in maintaining the budgets necessary for big-time scripted TV shows, according to Television Business International.
“We are in a correction, we can’t just promise spectacle and that’s not what TV needs,” said Nevins. “Costs are going up and we’re in bad moment now with the costs of supply chain, everything you’re doing costs more. There’s also a lot of production and that means talent [costs] keep going up.”
The amount of scripted TV that Nevins presides over does demonstrate the issues that Paramount is dealing with. Sci-fi shows like “Star Trek: Strange New Worlds” and “Halo” both require massive special effects budgets. Period pieces such as the “Yellowstone” prequel “1883” need money for historical costumes and sets that have to be built on location.
Nevins also presides over the TV slate at Showtime, where shows like “Billions” with large ensemble casts and big-times stars like Paul Giamatti also require a significant financial investment.
Nevins points to similar cost-cutting ventures at HBO Max and Netflix, but those two companies are currently pursuing very different strategies in regard to their scripted TV budgets. Warner Bros. Discovery has been cutting to the bone at HBO Max, nixing Max Originals, canceling movies for tax write-offs, and attempting to make more revenue from its films by ensuring that they get theatrical releases.
Netflix has taken a much gentler approach. Instead of slash-and-burn tactics, the company has paused growth on its budget for new content. That budget was set to grow from $17 billion in 2021, but the company decided to keep that amount where it is, instead of either cutting or expanding it. When Netflix’s planned ad-supported tier launches in early 2023, it may generate enough revenue to get Netflix’s content budget rising again.
So what does this mean for the future of streaming scripted TV? It depends on which services you’re watching. Amazon spent $250 million on the rights to develop “The Lord of The Rings: The Rings of Power,” and at least another $400 million on the first season alone. NBCUniversal recently announced that it had doubled its 2021 expenditure on content for its streaming service Peacock from $1.5 billion to $3 billion in 2022. Clearly, not all streamers are trimming their budgetary sails.
Paramount’s announcement should not be taken as a sign that the company is in any kind of dire financial straits. “Top Gun: Maverick” continues to be a financial juggernaut, and should give Paramount+ a big boost whenever it eventually arrives on the streamer. Paramount also recently announced a deal to bundle a subscription to Paramount+ with all Walmart+ subscriptions, which could bring millions of extra viewers to the platform.
However, if bigger budget shows like “Halo” end up not getting more seasons, this budgetary streamlining will surely be one of the reasons why.
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.