How Paramount+ plans to scale the streaming mountain
Through its history, Viacom and CBS have shaken up genres including reality TV with MTV's "The Real World," kids shows with Nickelodeon and TV news with "60 Minutes." The combined company is hoping to do it all again, this time in streaming.
During a more than three-hour Wednesday afternoon presentation filmed at the famed Paramount Pictures movie studio lot, ViacomCBS Inc. laid out its case for how it will compete in the streaming wars by leveraging legacy brands including MTV, Nickelodeon, BET, Paramount and CBS.
Paramount+ — launching March 4 in the U.S., Canada and Latin America in a rebranding of CBS All Access — will cost $9.99 a month for its premium, commercial-free tier, which is the same as the price of its predecessor. Its basic ad-supported tier, which debuts in June, will cost $4.99 a month, or $1 less than CBS All Access.
The company announced major programming, including a reboot of the classic NBC sitcom "Frasier" with Kelsey Grammer set to reprise his role, as well as a "Beavis and Butt-head" movie and a revival of the Nickelodeon cartoon "Rugrats." The company is also moving its long-in-the-works series adaptation of the video game "Halo" from Showtime to Paramount+. As with CBS All Access, a major factor in Paramount+'s appeal will be live sports, including NFL games, soccer matches and PGA golf.
ViacomCBS' effort faces an increasingly competitive market of streaming services, including Netflix, Amazon Prime Video, Apple TV+, Walt Disney Co.'s Disney+, AT&T's HBO Max, Comcast Corp.'s Peacock and Discovery Inc.'s Discovery+. Netflix has 203 million global subscribers, while Disney+ is nearing the 100 million milestone. Discovery on Monday said the company had surpassed 11 million streaming subscribers, including Discovery+ and other services.
The executives behind Paramount+ are hoping its combination of live sports, breaking news and its "mountain" of film and television entertainment will make the service a must-have.
"This is not your father's Viacom, and it's not my father's either," said ViacomCBS Chairwoman Shari Redstone, referring to her late father, Sumner Redstone. "This is a ViacomCBS that is being reimagined for a new kind of marketplace and a new kind of consumer.... Inside our value company is a powerful engine for growth."
Redstone seemed to rhetorically push back on critics who have questioned whether the company has gone far enough in its pivot to streaming.
"I want to be super clear about this. We are not confused about what we do. We are a pure-play content company," she said. "Some people will tell you that a company like ours has to choose, that we're either all in on linear or all in on streaming. We think that's a false choice. We're not about only linear or only streaming. We're about both linear and streaming."
In all, the company said the service will host 30,000 episodes of television shows and roll out 36 original series this year and more than 50 during the next two years, including reality programming with a "The Real World" reboot and kids series including a live-action program based on "Dora the Explorer." The company also touted content from its BET cable brand, as well as its stand-alone BET+ service aimed at Black consumers.
As for film, the Paramount+ service will be home to 2,500 movies from the Paramount Pictures library, as well as features from Miramax and other studios thanks to an expanded output deal with pay-TV channel Epix.
In a major shift to its movie strategy, ViacomCBS said certain films will head to Paramount+ 30 to 45 days after their theatrical launches. Paramount Chief Executive Jim Gianopulos said movies including "A Quiet Place Part II" and "Mission: Impossible 7" will be released on Paramount+ 45 days after hitting theaters. That's half the traditional 90 days that major films previously waited before becoming available in living rooms.
Studios have increasingly shortened the so-called theatrical window during the COVID-19 pandemic, which closed many theaters for the last year. Warner Bros. is sending its 2021 movie slate directly to HBO Max and theaters simultaneously. Universal Pictures is making its movies available for premium rental as quickly as 17 days after their big-screen premieres.
"We believe in the power of theatrical releases, and we have faith that after things get back to normal audiences will enthusiastically return to theaters," Gianopulos said. "At the same time, consumers have also increasingly embraced streaming as another way to enjoy films, and our strategy accounts for both."
For the revamped service's brand identity, ViacomCBS is leaning on the legacy of its storied movie studio, known for "The Godfather," "Chinatown" and the "Star Trek" films, rather than the CBS broadcast network, which skews older than other TV channels.
The company has ramped up marketing for the service with ads including a series of Super Bowl commercials in which Viacom and CBS characters, including Patrick Stewart as Capt. Picard, Dora the Explorer and Snooki from "The Jersey Shore," appeared on the snowy Paramount mountain. The service will also get a big promotional boost from CBS' broadcast of March Madness college basketball tournament games.
The New York media giant previously said Paramount+ will feature original content such as "The Offer," about the making of "The Godfather," a "Behind the Music" reboot from MTV and a "Yellowstone" prequel series. "The Offer" hit a snag recently when one of its stars, Armie Hammer, left the show amid a social media scandal.
Paramount+'s launch follows the late 2019 merger of CBS Corp. and Viacom Inc., using content from the companies' vast combined libraries of shows and movies to draw a bigger audience.
Executives also highlighted existing services Pluto TV (the free, ad-based streamer the company acquired two years ago) and premium network Showtime's over-the-top offering. The company announced a full-length movie to continue the Liev Schreiber series "Ray Donovan" on Showtime after the show was canceled at seven seasons last year.
The company has grown to nearly 30 million streaming subscribers so far (including CBS All Access, Showtime and BET+), while Pluto TV monthly active users hit 43 million. CBS All Access was first released in 2014.
The company projected that streaming subscribers will reach 65 million to 75 million by the end of 2024, with the vast majority coming from Paramount+. Pluto TV is expected to increase its monthly users to 100 million to 120 million in the same amount of time.
That growth won't come cheap. ViacomCBS said its spending for streaming content will reach $5 billion in 2024.
ViacomCBS also reported fourth-quarter earnings that beat analyst expectations. ViacomCBS generated adjusted earnings of $1.04 a share for the three months that ended in December, up from 92 cents a year earlier. Analysts on Wall Street on average expected earnings of $1.01 a share, according to FactSet. Revenue grew 3% to $6.87 billion, falling slightly shy of estimates of $6.88 billion.
Global streaming revenue grew 71% to $888 million, the company said. The surge was driven by a 74% jump in subscription streaming revenue and a 69% leap in advertising sales.