RIP Showtime, Buh-Bye BET: Paramount Wants to Get Bigger by Being Smaller
In today’s topography, Paramount Global has a mountain of streaming platforms. This time next year, the portfolio could amount to a hill of beans.
Most of Paramount Global’s streaming services are going up the river: The Showtime app will be shuttered in September when it’s fully integrated with Paramount+. A majority-stake sale of BET Media Group, including BET+, is on the block, attracting high-profile potential buyers like Tyler Perry, Byron Allen, and Diddy. Also up for sale is Noggin, basically the company’s Nick Jr.-junior streaming brand, according to the Wall Street Journal.
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Back in March 2021, the struggling CBS All Access became Paramount+ and by the end of 2022, Paramount+ boasted “nearly” 56 million subscribers. Showtime, both linear and streaming, as well as BET+ and Noggin, tacked on another 21 million or so subscriptions. (That’s mostly Showtime. Paramount does not break out numbers for BET+ and Noggin services and can you blame it?)
Those three represent 60 percent of Paramount’s streaming brands, but in no way do they represent the majority of its streaming business.
All told, Paramount’s streaming subs grew 2.5x in those two years — the vast majority at the core service, now called Paramount+. In that time, while the Viacom cable channels’ business decayed (save one “Yellowstone” on the random Paramount Network, basically), it became clear to leadership what was viable business worth investing in and what was just another streaming service. Now it’s time for cost-cutting to respond to the cord-cutting, and it’s all going to look very different.
The Showtime brand will live on via a million “Dexters” and a billion “Billions.” Showtime linear, as well as the priciest Paramount+ option that includes Showtime programming, will be rebranded as “Paramount+ with Showtime” and it will get even pricier.
A big piece of Paramount streaming is as un-pricey as it gets: Free. At the end of 2022, Paramount’s ad-supported Pluto TV reached nearly 79 million monthly active users and is a market leader. It could be tempting to fold Pluto into Paramount+ as a free entry-level option, though even rival NBCUniversal’s Peacock is exiting that approach. The Pluto TV brand is a strong enough to go it alone and there are no plans to integrate it into Paramount+, insiders maintain.
With both ad-supported and ad-free tiers, Paramount+ is not yet profitable. In 2022, direct-to-consumer revenue rose 47 percent, but costs outpaced the increase at 56 percent. Content spend won’t go down yet; last year, Paramount spent about $4 billion on streaming content and Paramount Global CEO Bob Bakish believes this year will see peak streaming spend. Operational efficiency is another matter; with the Showtime integration, Paramount Global CFO Naveen Chopra said the combination of services and staffs should create a writedown of $1.3-$1.5 billion in Q1 2023.
How to grow revenue growth, control spending, and be more efficient? Get rid of — and get a few bucks for — the dead weight.
Nathan Bolster/BET
Per WSJ, the idea behind selling a majority stake in Noggin (which currently streams Nickelodeon kids’ shows like “Paw Patrol” and “Peppa Pig”) is to increase the brand’s revenue potential. Paramount wants to sell control to a party that’s interested in making it an interactive learning platform and the studio would retain a stake.
A spokesperson for Paramount confirmed to IndieWire that it is accepting offers for a majority stake in BET Media Group, which includes the BET and VH1 cable channels as well as BET+. The spokesperson declined to discuss a potential sale of Noggin.
There’s also the possibility that all of Paramount may be for sale: Bakish has repeatedly stated that a priority for all major corporate decisions is making it an attractive target for potential acquisition. The would-be buyers out there: There’s NBCU parent Comcast, and tech giants Apple and Amazon have practically unlimited funds. Media consolidation, like the streaming wars, may only be getting started.
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