Paramount+ Launch Marks the End of a Streaming Era

Paramount+ Launch Marks the End of
Variety Intelligence Platform

Now that Paramount+ is finally out the door at ViacomCBS, forgive yourself if your eyes glaze; another day, another streaming service, right?

True, Paramount+ isn’t so much a launch as it is a relaunch of CBS All Access but with a much bigger and better programming slate. Thirty-six original series — many of them rebooting some of the most successful intellectual property in ViacomCBS’ vaults — are on tap for this year, backed by 30,000 hours of catalog TV shows and 2,500 films.

But Paramount+ isn’t just the latest in a seemingly endless assembly line of plus-sign brands. What the venture truly represents is ViacomCBS becoming the final major power player to belly up to the high-stakes streaming table and go all in. A competitive field that began 14 years ago with a scrappy DVD-by-mail company known as Netflix expanding into subscription ultra-premium video has now filled out completely.

No one else is expected to crash this party. Sure, Roku seems clearly headed toward a future in original programming in the wake of last year’s Quibi deal. But the connected-TV king will probably make a more modest investment than what’s required to play high-stakes streaming: multibillion-dollar investments in both originals and library. Research firm Bankr estimates Netflix will spend $19 billion on content this year.

Perhaps not coincidentally, ViacomCBS is both the latecomer and one of the smallest of the behemoths ready to do battle here. It is dwarfed by the tech entrants, Amazon and Apple, as well as its media brethren Disney, AT&T and Comcast. Each has put its best foot forward sometime over the past 12 months and staked its claim on an audience influx fueled in part by lockdown.

Strangely enough, we find ourselves at a moment in which Wall Street seems to be under the mistaken impression that the success Disney+ has found in particular awaits other new market entrants. What else to make of the absurd rally many media stocks including Discovery, ViacomCBS and AMC Networks are on by distracting investors from these companies’ current COVID-induced financial woes with a fantasy of their streaming future?

How long does Wall Street believe the race could continue with as many different players as are in the market right now? While it seems inevitable investors will eventually turn on some of these stocks, how much patience they’ll have remains to be seen.

Another question is what it even means to win in streaming, particularly as a different survey seems to emerge every passing week with regard to just how many of these services average consumers will purchase. ViacomCBS seemed to be pushing it with the suggestion at its investor day that five per household would be common., a questionable notion WarnerMedia CEO Jason Kilar seemed to echo Thursday at a Morgan Stanley conference.

Surely there will be more than one winner, and Netflix, Amazon and Disney could be said to occupy a top tier of their own at this early stage. For everyone else, it may very well remain unclear for years as to just how long Paramount+, HBO Max, Peacock and Discovery+ will be willing to dent their heads trying to crack their second-tier ceiling. Whether there is any room left already in the top tier is debatable.

This field is going to winnow, though it’s also debatable whether category losers will exit the market completely or simply pivot to a different place in a streaming-market hierarchy that’s barely begun to unfold. Recall at some point in its tortured history, ViacomCBS fancied itself an arms-dealer studio content to sell content to the highest bidder rather than be a direct-to-consumer brand; one of these companies could conceivably retreat to that position.

More likely the winnowing will be as a result of M&A activity, whether the long-speculated union of NBCUniversal and AT&T could yield a fourth streaming superpower or another second-tier player like deep-pocketed Apple acquires a rival.

But what makes it difficult to project how many players will be in this market in the long term is that what it means to play isn’t so simple. Take a company like Lionsgate’s Starz, which has no illusions about cracking the top tier. Its eye is on a fate more ambitious companies may have to settle for, which is playing second banana as a cheaper-priced option behind bigger subscription purchases.

Don’t look for answers to all these questions anytime soon. Now that we know who the players are, how the rest of the game will play out is anybody’s guess.