Paramount Global can be seen as a late-comer in the streaming world as its core streaming platform, Paramount+, only launched in 2021. This succeeded the company’s previous direct-to-consumer service, CBS All Access, which was focused on live streaming CBS’s programming, housing legacy titles and rolling out a small selection of originals. The new streaming platform provides the company with an alternative to the declining linear-TV business, but it also involves heavy content costs, raising questions about Paramount’s licensing strategy.
While Paramount’s licensing strategy in the past has been cast as a negative -- especially regarding Yellowstone, one of its most popular shows, which streams on rival service Peacock -- the effort to generate revenue and not consolidate a full corporate catalog under one roof is now desired by investors. This holds particularly true after the media company reported lower than expected quarterly profits in Q4 2022.
Paramount Global has the capacity to increase its licensing revenue as the owner of a high-value catalog, particularly CBS procedurals and animation from cable channels such as Nickelodeon and Comedy Central. According to Parrot Analytics’s data, CBS’ NCIS is the most in-demand Paramount Global procedural, with 27.87 times more demand than the average show in Q4 2022. In terms of Paramount Global’s roster of procedurals, NCIS is followed by Hawaii Five-0, Blue Bloods, and Criminal Minds, all of which carry outstanding levels of demand.
Despite the high demand for the genre, the most popular shows from the company have a more humorous tone. Comedy Central’s South Park ranks first among the corporate company’s total library while CBS sitcom The Big Bang Theory ranks a close second. Paramount Network’s Yellowstone, Showtime’s Billions and NCIS round out the top five.
Paramount faces the same dilemma as all the other major companies in the industry: balancing licensing revenue without diluting the long-term prospects of its streaming services. According to Parrot Analytics’ Corporate Demand share, which accesses the long-term viability of the top media companies by measuring the potential value and strength of its original content in the licensing market, Paramount had the third largest demand share for original content last year, behind only The Walt Disney Company and Warnes Bros. Discovery. Despite this, Paramount’s primary streaming platform, Paramount+, ranked 5th in TV catalog demand share among SVOD platforms in 2022.
Despite these issues, Paramount+ boasts some key advantages. The platform has a loyal subscriber base focused on kids content, live sports and news, the Star Trek franchise, and the growing roster of series from popular creator Taylor Sheridan. The service is drawing attention thanks to a diverse content funnel across its parent company’s many divisions.
The chart below shows which brands are the main demand drivers of Paramount+’s catalog. Titles that premiered on linear CBS are responsible for more than one-fifth of the TV catalog demand, while Nickelodeon shows made up 19.0% last quarter. Paramount+ originals (11.6%) are a relevant part of the platform’s demand, largely driven by shows such as former CBS original Seal Team and the ever-expanding Star Trek franchise.
The platform could potentially increase its value perception in the eyes of consumers as it further integrates Showtime into the main service. This would bring popular shows like Billions, Dexter and Yellowjackets to Paramount+ proper, where the platform’s core franchises are already available. As of the last quarter of 2022, Showtime originals would represent 12.5% of the demand for the combined streaming effort, behind only CBS and Nickelodeon. This underscores the value the premium cable network, which has long courted a female audience that would be complementary to Paramount+’s older and male viewers, can bring to the company’s ongoing direct-to-consumer efforts.
