What a Paramount+/Showtime Merger Could Mean for Niche Streamers

Bob Bakish
Illustration: VIP+; Bakish: Bryan Bedder/Getty Images

When Paramount Global CEO Bob Bakish got the keys to the combined kingdoms of CBS and ViacomCBS, he sought to create the streaming world in the image of the existing TV world. 
 
“We will replicate TV in streaming,” he would say on every earnings call, parroting the line that, in the U.S., Paramount Global would have streaming offerings in free, pay and premium pay. 
 
This was always highly optimistic. For one thing, Paramount’s free TV offering is spearheaded by CBS, offering live NFL games and new episodes of big-name comedies and dramas. And for all of VIP+’s championing of FAST as an emerging content delivery format, the company’s Pluto TV will never be the same as CBS. A fairer comparison would be to the diginets Paramount Global offers — such as Dabl — which are mainly composed of reruns. 
 
Opting to position Paramount+ and Showtime as pay and premium pay streaming services requires a magician of Houdini’s caliber, considering the ad-free tier of Paramount+ costs just a dollar less than Showtime. In content as well, the two began to blur into each other as Paramount+ sought edgy content that once would have been seen as a fit for Showtime, in addition to taking “Inside the NFL” from its longtime Showtime home
 
It was also a little bewildering, at least from a consumer perspective, that the two were not combined at the launch of Paramount+. Whilst this was due to existing cable deals, Paramount Global positioned the decision not to do so as being confusing to consumers. Yet having a rebranded service offering hits including “Dexter” would have strengthened its consumer appeal and made it an instant force to be reckoned with. 

This is now what Paramount is looking to fix by ending Showtime as a standalone streaming service and adding its content to Paramount+. The two have already been bundled and available under the same roof since Aug. 31 in what was likely an experiment to test reception. 

It gets a little confusing as to whether the Showtime Anytime service will be still available, per a statement the company gave to Variety. For those unfamiliar, Showtime Anytime is the streaming platform TV subscribers to Showtime have to use to stream content, versus the Showtime streaming app for independent subscribers. It’s worth noting that other premium cable services — such as HBO and Starz — have the same app for cable and streaming subscribers. It’s only Showtime with this complexity. 

A big barrier to the proposed merging of services are existing deals with TV providers. Bakish suggested he had discussed the bundled service with pay TV partners, but it’s likely that concessions will be made to get the proposal off the ground. This likely will mean complementary access to the ad-supported tier of Paramount+, either for Showtime subscribers or all subscribers, much as Peacock is available to Comcast, Cox and Charter subscribers. 

The need to combine the two services speaks to the changing forces within subscription video. Economic pressures due in part to inflation have reduced discretionary spending power of many households. This has seen a change in opinion regarding smaller and niche streaming services. 

In 2021, when the economy was growing and inflation was low, companies including Starz and AMC would frequently champion their niche streaming strategies during earnings calls. The theory was that these services didn’t compete with broad services Netflix or Prime Video but instead offered corresponding content not available on the SVOD giants. 

Yet these services are ones that will see growth slow as money becomes tighter and households are more likely to opt for broad options that can entertain everyone. Even the likes of Discovery+ have found that growth is not as easy to come by in the era of big streaming, with the service adding 1 million-2 million global subscribers each quarter, likely a big factor behind its merger with HBO Max in 2023. 

Long term, the merging of Showtime into Paramount+ will create one of two possible ripple effects. More services will seek to be bundled together in a re-creation of cable TV. Another is that cable TV itself becomes the grand amalgamator of content, offering subscribers access to streaming services run by TV networks. 

Should that happen, there will be an inevitable sense of déjà vu among consumers. VIP+ has previously noted how streaming strategies led to a reduction in originals on TV as resources were moved to streaming, weakening the long-range value proposition of TV. How ironic it would be for the same streaming services to ultimately be bundled back into pay TV subscriptions.