Why Paramount+ Streaming Channels Need to Embrace PAST

Why Paramount+ Streaming Channels Need Embrace
Cheyne Gateley/VIP+

ViacomCBS’ Paramount+ service recently launched 18 linear streaming channels exclusively for subscribers.

This makes Paramount+ the third SVOD venture, after AMC+ and Discovery+, to incorporate a premium version of free ad-supported TV (FAST) into its streaming offering. Yet surprisingly for the media company that’s done the most to promote FAST following its acquisition of Pluto TV in 2019, ViacomCBS did not include ads in the premium channels.

Ignoring what VIP+ dubbed PAST — premium ad-supported streaming TV — in September 2020 doesn’t make sense considering Paramount+ not only includes ad-supported TV and streaming channels as part of its lineup (CBS, CBSN, CBS Sports HQ and ET Live) but has an ad-supported subscription tier for viewing on-demand shows and movies.

It seems disjointed to offer ads for on-demand content but not in linear.

In fairness, this is the case for all of the ad-supported SVODs currently with linear channels, not just Paramount+. AMC+ also features ad-supported streams of its four cable networks within the service, making the lack of ads for the AMC+ channel and "Walking Dead" channel even more baffling.

Including streaming linear channels within an SVOD service follows the example set by Peacock, even though its channels are currently only FAST. It boosts engagement time for users and provides an alternative for when the paradox of choice strikes in searching for on-demand content.

This is critical for maximizing future revenue growth and boosting reported ARPU, one of Wall Street’s favorite success metrics for streaming. It will also boost TVT (Total View Time), a favored reporting metric among media execs.

Also critical would be incorporating branded FAST channels into the services (much as Peacock currently does). It seems a missed opportunity to externally distribute branded channels — which are among the most popular of all FAST channels, per data VIP+ has seen — to independent services but not include them on in-house products that would be yet another source of revenue growth.

In a year or two, PAST will be standard for ad-supported SVODs, and also expect premium linear channels without ads to be part of ad-free services. When it emerges that these raise engagement and revenue and reduce subscriber churn, others will jump in.

But for now, the services bold enough to create exclusive channels for their services need to be bolder. It seems strange to say this about media companies that are seemingly unstoppable in increasing ad time on linear TV, but they must also embrace ad breaks on cable TV’s streaming equivalents. To not do so is leaving money on the table.