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Paramount Global CEO Bob Bakish says his studio is increasingly focused on its fast-expanding streaming model to compete against market leaders Netflix and Disney, but has yet to declare when Paramount+ and Pluto TV will be as profitable as CBS once was on its own as a cable TV juggernaut.
“We’ve always built this with the idea of building a real business and profitability in mind and will continue to make headway on that in 2023,” Bakish told the UBS Global TMT Conference during a session that was webcast.
But he added the all-in push to streaming by Paramount aims at a “multiplatform asset portfolio” that takes time to build out. “You think about using content across linear platforms and streaming that creates cost advantages, you think about marketing and leveraging platforms that creates cost advantages,” Bakish explained as he talked about the studio’s streaming playbook.
As an example, he touted the performance of Paramount Pictures titles like Tom Cruise’s Top Gun: Maverick and the Smile horror pic in theaters, before they moved to Paramount+, potentially within a 45-day window to maximize audience reach.
But while reiterating that 2023 will see peak investment for Paramount’s streaming platforms, and so continuing losses, the studio head predicted getting to profitability was another matter, and investors needed to be patient. That’s because the company has a “multifaceted product” model in streaming, which includes paid subscription services like Paramount+ and Showtime, vital content suppliers like Paramount Pictures and CBS, and ad-supported platforms like Pluto TV.
“So it takes a little while. But we are very focused on streaming profitability and building a financially compelling business here, and we’re very much tracking in that direction,” he added. Bakish also argued his studio’s wholesale pivot to streaming was mitigating the impact of accelerating cord-cutting on the cable side.
“The TV ecosystem is under pressure. That’s the bad news. The good news is we’re a cornerstone supplier. And we’re no longer in just the business of licensing linear feeds to video bundle operators. We are now in the multifaceted product with distributors, including for broadband-only,” he insisted.
Bakish also talked about the current state of the advertising market, and its impact on his studio’s streaming arena push. “The current market is challenging. That challenge is both on the linear and digital side,” he reported as fourth-quarter ad revenues at the studio are expected to come in below third-quarter levels.
At the same time, Bakish added: “While challenging, advertising is cyclical. This too is a cycle. This too will turn. The only question is when.” The Paramount boss also discussed the failure to shed a non-core asset like publisher Simon & Schuster to put more freed-up money toward streaming content.
Bakish said the book-publishing giant is back on the market for another suitor after a federal court judge blocked a deal with Penguin Random House and Paramount collected a $200 million break-up fee. “It continues to be a non-core asset. We’re going to do something in the marketplace with it, as we move forward. To be discussed,” he told the investor conference.
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