NEWS ANALYSIS — In the TV ad, actor Patrick Stewart (“Star Trek: Picard”), dressed in a tuxedo, summons a group of characters from various ViacomCBS television shows, including puzzled PGA Tour golfer Bryson DeChambeau, atop the icy 29,150-foot “Paramount Mountain” to talk about their pending subscription streaming VOD home, Paramount+, which launches March 4.
“What are we supposed to do up here?” asks a bundled up Nicole “Snooki” Polizzi from MTV’s “Jersey Shore.” “We dance,” replies Stewart. “Sure, let’s make it weirder,” deadpans comic Stephen Colbert.
If the TV personalities seem confused, imagine how ViacomCBS brass feel tasked with bowing the market’s sixth new SVOD platform in the past 17 months? CEO Bob Bakish is slated to reveal further details on the media company’s Feb. 24 investor day.
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The Paramount Mountain ad is the third of four commercials that began airing in the past month touting the latest SVOD competitor in a market saturated by Netflix, Disney Plus, Hulu and Amazon Prime Video, among others. By all accounts, Paramount+ — like the namesake studio — faces an uphill path to market share or relevance.
Netflix ended 2020 with more than 203 million subscribers, followed by Disney with 146 million (Disney Plus, Hulu, Hulu+Live TV, ESPN Plus) and Amazon, which disclosed 100 million Prime Video subs in 2018. By comparison, ViacomCBS had 16 million combined subs for CBS All Access and Showtime OTT at the end of the most-recent fiscal period. And only All Access is morphing into Paramount+.
“They are in a scripted-entertainment arms race with companies that are just so much bigger,” MoffettNathanson analyst Michael Nathanson told Bloomberg. “They need to do something to attract more subscribers.”
Paramount+ will cost $5.99 monthly/$59.99 annually with limited commercials, and $9.99/$99 for a commercial-free option. To entice subscribers, ViacomCBS is offering a 50% discount on the annual fee when using the promotional code “ParamountPlus” until March 3.
Surprisingly, among challenges facing Paramount+ out the gate: Exclusive content. Following a pandemic 2020, Bakish licensed away rights to Paramount Pictures movies and Paramount Television content, including “Yellowstone” to NBCUniversal’s rival Peacock SVOD platform. The series, starring Kevin Costner as a cattle rancher in Montana, is Paramount Network’s biggest-ever TV show.
Indeed, Paramount Television produces shows for Netflix, Amazon and Facebook. For instance, the show “Jack Ryan” is on Prime Video. The company launched Viacom Digital Studios to produce social media friendly content for outlets such as Facebook.
“They sold everything to Netflix,” said Wedbush Securities media analyst Michael Pachter. “They got addicted to the earnings stream.”
Bakish admits the license deals are financially accretive to the bottom line; telling a CES event in January that he believes “there’s a lot of value in assets that we already own.” The executive contends the goal is “unlocking opportunity through truly multi-platform distribution,” whether it be AVOD, SVOD, legacy platforms or other models.
VIacomCBS has made a huge push into AVOD through the 2019 acquisition of Pluto TV. Its founder, Tom Ryan, is now in charge of ViacomCBS Streaming, overseeing all streaming and digital platforms including Paramount+.
“Relative to some of our peers, we’re further along in this [digital] transition,” Bakish said.