Paramount Global Rebrands For Streaming Future With Big Changes

The company you used to know, clunkily, as ViacomCBS is now Paramount Global, tapping the mid-sized media company’s oldest brand. More importantly, Paramount executives spent an afternoon publicly committing their company to a direct-to-consumer, streaming future that bends every corner of the operation to its success.

Company Board Chair Shari Redstone, CEO Bob Bakish, a host of company executives and such notable collaborators as Tom Cruise (Top Gun Maverick, the next two Mission: Impossible films), JJ Abrams (multiple Star Trek projects), John Krasinski (A Quiet Place) and Taylor Sheridan (Yellowstone, 1883) spent two hours detailing the breadth of the company’s commitment to streaming, followed by 30 minutes of analyst questions.

The big announcements, and there were many of them, come after years of half-hearted investments that led to so-so products substantially ignored by the market. The new commitment comes at a crucial new stage of the streaming wars, as deep-pocketed competitors settle in with high-profile shows and strong audience relationships.

But nearly a year after the company rebranded and beefed up subscription service CBS All-Access into Paramount Plus, and two years after acquiring ad-supported platform Pluto, the company gave a full-throated embrace of its streaming future that outstrips that of just about all its Hollywood competitors.

“This is a time characterized by great momentum and tremendous go-forward opportunity,” Bakish said.  “Our momentum is building and as it grows, as we take Paramount Plus and our other streaming businesses to the next level, the size of the opportunity we see ahead is matched only by the scale of our ambition to seize it.”

The company unleashed a volley of different announcements, commitments, shifts in approach, partnerships, and more, all designed to bend everything it does toward streaming. Among the news:  

• The company built from the 2019 merger (or technically, re-merger) of Viacom and CBS will now be called Paramount Global “or simply, Paramount,” Redstone said, adding “there is no higher priority for us, and no higher priority for me, than unlocking and maximizing value for all of our shareholders.” The company will trade on Nasdaq under the tickers PARAA (Class A common), PARA (Class B common) and PARAP (Preferred Stock) beginning Thursday morning.
• With good progress on audience growth on both the subscription and ad-supported side, the company raised its 2024 targets by about half, to 100 million subscribers by the end of 2024. Average revenue per user continues to grow both for Paramount Plus and Pluto, a key measure of sustainability. Direct-to-consumer revenue goals were bumped from $6 billion to $9 billion. 
• “Many millions” more subscribers are expected to come from this summer’s launch of SkyShowtime in Europe with Comcast’s Sky operation, Bakish said. International expansion will be much broader this year, adding 60 more territories on top of the 25 added in 2021.
• In a welcome move toward increased transparency and clarity, the company will break out subscriber/user additions and ARPU for Paramount Plus and Pluto, something few of its peers are doing. The company will also change the way it accounts for production costs, to better allocate the relative benefit for each platform where a show appears. That change in accounting shows that the company would have lost $2.2 billion on streaming operations in 2021, and $1 billion the previous year, CFO Naveen Chopra said. The company expects continued losses in 2022, but diminishing levels as audiences grow, international expansion continues, and more content helps justify higher pricing.
• In another welcome move to alleviate one of the vexing realities of the fractured streaming ecosystem, the company will roll out a new streaming bundle of Paramount Plus and Showtime, priced at $11.99 to $14.99 per month, depending on what tier of Plus is chosen. More importantly for users, the bundle will include a single sign-on and billing, and integrate access to the Showtime programming directly in Paramount Plus’ interface. Disney has begun doing something similar in bundles of its Hulu and Hotstar general services with ESPN Plus and/or Disney Plus around the world
• The event featured a blizzard of announcements regarding new series, sequels, spinoffs, crossover movies, and related casting and new-season announcements for a swathe of franchises from Star Trek to Transformers  to Blue’s Clues to Beavis & Butthead, among much else.
• The company also committed to pulling back under its control a huge swathe of prominent programming and funneling it into Paramount Plus. That includes first-run movies, which will now appear either directly on Paramount Plus or in the Pay One distribution window after an initial theatrical run. It also includes such big franchises as South Park, whose more than 300 episodes are currently available on competitor HBO Max. “Repatriating” all that content will take until 2024, but should provide a huge bump in attractive content for the service, executives said.

“On Paramount+, we have something for everyone,” said Chief Programming Officer, Streaming Tanya Giles. “We are taking our broad content offering and deepening it with more content in key categories, building on our treasure trove of IP to create lasting, hit franchises.”

All told, it represents one of the most significant expressions of a DTC, streaming-first mentality by any of Hollywood’s major media companies. Given that Paramount is far smaller than tech giants Apple and Amazon, pure-play streamer Netflix and Hollywood giant Disney, a clear focus is a vital move, for however long Redstone wants to keep independent the company her father built.

“We see a huge global opportunity in streaming, a much larger potential market than can be captured by linear TV and film alone,” Bakish said. “We’re excited about our ability to not just compete, but thrive, creating significant value for both consumers and shareholders. How? Because we’re broader in four key areas: our diverse content, streaming model, mix of platforms and global reach. As we look forward, the size of the opportunity we see is matched only by our ambition to seize it.”