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ViacomCBS Q1 Review: Paramount+ Content Strategy Needs Work

ViacomCBS Q1 2021 Earnings
Cheyne Gateley/VIP

The next step for growing Paramount+ is going to be dusting off the plans for another Paramount-branded property.

During Thursday’s Q1 earnings call, ViacomCBS CEO Bob Bakish announced that his SVOD service will be releasing one original movie a week in 2022. Pressed by analysts for more details, he said the vast majority the movies will be produced for Paramount+ — many by in-house studios.

That’s a good strategy for keeping subscribers active, but it is a carbon copy of what was announced last September for then newly rebranded Paramount Movie Network. What this means for those plans was unclear, with it possible that both Paramount+ and PMN will have access to the same movies, but CFO Naveen Chopra did mention during the call that the company continues to move assets from linear to digital.

This was the first quarter where ViacomCBS only gave international figures for its streaming services, meaning previous subscriber data that’s comparable is spotty at best. Both free and subscription services added 6 million users/subscribers in the quarter, up 14% to 49 million for Pluto, and up by 20%, to 36 million for subscription.

It’s too early for it to be a trend, but worth noting that total adds for Pluto were a million fewer than seen in the prior quarter.

Pluto TV generates more total revenue than the subscription streaming wing of ViacomCBS currently, but both areas saw significant year-over-year growth. Revenue from subscription streaming is up 58% YoY, with Pluto seeing YoY increases of 70%.

Streaming revenues from advertising (up 62%) and subscriptions (up 69%) also grew, with the subscription revenues exceeding those reported for subscription streaming services. This is due to how ViacomCBS reports: subscription streaming ($322 million) is the streaming sub-unit under TV Entertainment and includes domestic Paramount+, CBSN and other digital ad revenue sources. Streaming subscription revenue ($388 million) includes subscription revenue across all domestic and international streaming services, including the likes of Showtime OTT, BET+ and Noggin.

During the call, Bakish claimed Pluto TV’s ad load is substantially below that of linear TV, a significantly different finding than what VIP found when analyzing the ad loads of “Unsolved Mysteries” across all FAST and AVOD services. Pluto’s linear load equaled that of linear TV and topped all FAST services. Being charitable, perhaps Bakish was comparing Pluto’s AVOD load versus linear TV, but even then it should be noted that Pluto again led the pack for AVOD ad loads.

Someone at ViacomCBS also should point out to Bakish that his tagline for Paramount+ — live sports, breaking news, mountains of content — doesn’t contain the number of unique selling points as he thinks. Breaking news in particular is something available for free across many free streaming competitors.

Yes, Paramount+ is home to live local feeds of CBS stations across the country, but Tubi has plans for a hundred Fox affiliates to be included, STIRR already has over a hundred Sinclair-owned stations available, and IMDb has significantly beefed up its own local news coverage. It’s not the draw Bakish envisions, as even Pluto has a number of CBSN local streaming stations capable of breaking news.

What would be a draw, original movies aside, is original shows and significant library titles. Bakish is addressing this, first by upping spend on originals — perhaps soon, Paramount+ will have a bona fide hit of its own — and second by reducing assets licensed out to other streamers.

This has been a hallmark of Bakish’s streaming strategy, under the guise of monetizing content from non-subscribers, but shows a shift in direction as the company looks to grow its own service.

Given the success Bakish said kids content is having for Paramount+ as an engagement driver, one innovation to announce in coming months is surely the integration of linear streaming channels based on Nickelodeon content within the streamer. This would likely yield increased engagement times, and with Pluto head Tom Ryan now heading ViacomCBS streaming, a “Premium Pluto” would be a logical step to make.