In their last outings as leaders of ViacomCBS, the executive team led by Shari Redstone and Bob Bakish finally started to sound like they have a solid plan to compete in streaming.
On the day ViacomCBS unveiled its corporate rebrand to Paramount, starting as of Feb. 16, the company put on a nearly three-hour virtual presentation for investors that demonstrated how much its operations have been turned inside out to focus on streaming growth opportunities. Paramount, like its larger legacy media brethren, is betting the farm on refurbishing its TV and film businesses for new profit models and a new era.
And it’s about time. For the first time in ages, executives associated with Viacom and CBS seemed genuinely energized about the content and the strategies they touted. Viacom for so long was a lumbering basic cable TV battleship that could never seem to turn around its once-marquee channels no matter how many management changes were implemented. During the presentation, executives from Paramount’s many divisions detailed an effort to bring a more holistic approach to the company with most, if not all, roads for its content leading through Paramount Plus at some point.
Moreover, Bakish told Variety in an interview after the presentation that in his view, the company’s Pluto TV free streaming channel platform is “still the most under-valued asset on the planet.”
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The new-model Paramount is also pouring money into content at a rate that neither Viacom nor CBS Corp. was able to do on its own prior to the re-merger of the Redstone media empire in late 2019. On Tuesday, the six content executives who made presentations had big projects and bold long-term plans, whether it was Brian Robbins with a roadmap of TV and film plans for “Paw Patrol” and “Sonic,” or Chris McCarthy detailing how “Yellowstone” prequel “1883” got a strong sendoff through creative windowing on linear and digital; or George Cheeks talking up plans for “NCIS: Sydney” while David Nevins lassoes high-end scripted projects such as the long-awaited “Halo” series for Paramount Plus and a hoped-for new narrative franchise for Showtime with “Super Pumped.”
In short, it feels like the erstwhile ViacomCBS has finally committed to taking the company down to the studs to rebuild. Corporate Paramount will miss the third-party checks that used to come in from sales of movies and TV series to outside parties. But the decision to send all Paramount Pictures releases to Paramount Plus for the all-important Pay 1 window is an investment in the future.
All of that enthusiasm was backed up by big moves to raise financial and operational guidance. Paramount is aiming to reach 100 million global direct-to-consumer subscribers by 2024, up significantly from the 65 million-75 million previously forecast. DTC revenue is expected to spike to $9 billion by 2024, up from the $6 billion forecast last year by 2024. Increases like that have to be backed up with some kind of reality, not just optimism.
“What we’re seeing is a model that is working significantly better than we projected,” Bakish said. “We saw that most recently in the fourth quarter with growth on the pay side and the free side.”
Bakish told Variety that he hopes investors came away from Tuesday’s event with a sense that the company has clear momentum that drove the rosier guidance. He emphasized that Paramount is well supported by having the balance of premium subscription services (Paramount Plus, Showtime), content engines in Paramount Pictures, CBS, MTV Entertainment, and the ever-expanding ad-supported channels of Pluto TV.
As the presentation demonstrated, Paramount is no longer prioritizing the legacy linear channels beyond CBS, which operates at a far higher level than any other linear channel in the U.S. portfolio. The domestic MTV runs a 24/7 loop of “Ridiculousness” episodes most days while the energy and resources are going in to reinventing reality TV formats for global audiences.
But Bakish dismissed talk of linear being an albatross for the company – far from it. “It’s not in vogue to talk about legacy assets being highly valuable to streaming,” he said, pointing to the promotion that CBS gives to Paramount Plus every hour. “It’s helping to drive growth and it gives us an advantage on amortizing content costs,” Bakish said. “That’s why we see a path to a bigger streaming business on a subscriber basis and on a financial basis.”
Bakish makes no apologies for the high volume of reboots, remakes and reimagining under the Paramount umbrella. Paramount can’t afford to not revisit everything in its arsenal to help create sticky new shows and to draw audiences to Pluto TV with older content. Paramount is using that playbook around the world, particularly with its investments in Latin America.
The decision to change the company’s corporate name (and ticker symbol) to Paramount is part of the effort to set a new tone, Bakish said. “ViacomCBS screams that we’re two companies, and we’re not, we’re one company,” Bakish said. “The other economic rationale is that any dollar spent on ViacomCBS branding has no consumer benefit. As we talk about Paramount, the consumer benefit accrues back to Paramount Plus and Paramount Pictures. When we raised this to the board, the answer was, ‘Why wouldn’t you do this?’ ”
