Paramount+ Enters Streaming Race With ‘Frasier,’ ‘SpongeBob’
(Bloomberg) -- Disney+ has Marvel and Star Wars. Paramount+ has a “mountain of entertainment.”
ViacomCBS Inc. announced plans Wednesday to release dozens of new TV shows and movies to buoy its streaming service, which will be renamed Paramount+ next month. The lineup will include live sports and news, shows based on the classic movies “Flashdance” and “The Italian Job,” a revival of “Frasier” and a spinoff of the popular western “Yellowstone.” All told, Paramount+ will include more than 30,000 episodes of TV and a couple thousand movie titles.
Management is hoping all of these new programs help Paramount+ stand out in a crowded market for paid streaming services. Netflix Inc. is the clear No. 1, followed by Amazon.com Inc. and Walt Disney Co. Paramount+ is vying to be leader of the next tier of competitors, which includes AT&T Inc.’s HBO Max and Comcast Corp.’s Peacock.
“Today we affirm anew that ViacomCBS is indeed one of the kings of content,” Chairwoman Shari Redstone said at an event to promote the company’s streaming services, rephrasing a term said to be coined by her late father, media mogul Sumner Redstone.
Redstone pushed for the 2019 merger of Viacom and CBS -- both controlled by her family -- to better position them for Hollywood’s shift to the internet from linear TV. Once leaders in broadcasting and cable, both Viacom and CBS have suffered from the slow collapse of pay TV.
The company’s three streaming services, Paramount+, Showtime and BET+, now have nearly 30 million subscribers, up by more than half in the past year. ViacomCBS projected those services will reach 65 million subscribers by 2024, with most of the growth coming from Paramount+.
Consumers pay for three or four services right now, but will increase that to five or six in the years ahead, the company predicts. ViacomCBS will use Pluto TV, a free, advertising-supported streaming service it owns, to market the paid services and will reduce the base price of Paramount+ to $4.99 a month from $5.99.
ViacomCBS has fewer resources than Netflix, Disney, Comcast or AT&T, all of which are worth more than five times as much. But it does have a long history of making successful shows, like “SpongeBob SquarePants,” and will mine its catalog for opportunities to remake and revive popular programs.
“ViacomCBS has been a consistent hitmaker,” Chief Executive Officer Bob Bakish said at the presentation.
The company plans to release new reality TV series, documentaries, dramas and original movies every week. That includes putting some new films online just 30 days to 45 days after they leave theaters, compressing what has historically been a 90-day period of exclusivity for cinemas. Sequels to “A Quiet Place” and “Mission: Impossible” will follow that model.
ViacomCBS shares have been on a tear, climbing 76% this year, because of enthusiasm that a commitment to streaming would pay off in the years ahead. Viacom’s financial results for the final three months of 2020 were largely in line with Wall Street expectations.
Advertising sales grew 4% in the fourth quarter, reversing recent declines. Like other broadcasters, ViacomCBS has suffered a loss of TV viewers to streaming services. Those troubles were magnified in 2020 by slumping ad sales because of the coronavirus pandemic, which closed stores and restaurants, and forced marketers to pull back on promotions.
The loss of ads has been softened by increased fees from pay-TV providers since the merger of Viacom and CBS gave the company new heft in negotiations. Those fees rose 13% in the quarter, and 7% for the year.
But the company’s long-term prospects depend on streaming. The pay-TV business has plateaued, and Wall Street has awarded higher valuations to companies that commit fully to streaming.
While developing its own streaming businesses, ViacomCBS in recent years has also produced a number of hits for other services, which have used them to boost their own subscriber totals. But the company is now adjusting that strategy and will reduce the number of programs it licenses to others, opting instead to keep shows for itself.
ViacomCBS plans to increase its investment in streaming, from $1 billion a year to at least $5 billion annually by 2024. Outside the U.S., ViacomCBS is combining its paid services into one product, folding Showtime under the Paramount+ umbrella. The service has more ground to make up abroad, where Netflix, Amazon and Disney+ have large advantages.
ViacomCBS said all the right things Wednesday. Now it remains to be seen how many potential viewers sign up.
©2021 Bloomberg L.P.