ViacomCBS CEO Bob Bakish told Wall Street on the company’s second-quarter earnings conference call on Thursday that the company remains committed to the theatrical window, but also said windows will likely shorten, with new business models becoming more common.
Asked about a reduced 17-day theatrical window that fellow exhibitor AMC Theatres and Universal Pictures recently struck an agreement for, he said Paramount “is an incredible asset” with a “powerful collection of IP” and “massive library.”
Amid the coronavirus pandemic, he said the studio has been “focused on protecting asset value” by saving key films, such as Top Gun Maverick, for 2021, which should be “healthier” for cinemas and the box office and monetizing others, such as Love Birds, to get a return on investment and avoid overcrowding 2021 with “even more product” as the year was “starting to look pretty full.”
In addition, the new SpongeBob movie will be used strategically in the U.S. by the company for the 2021 launch of its rebranded CBS All Access streaming “super service” launch after a short premium VOD window.
“We really are in a COVID rules phase of the business right now,” he said about the PVOD experiments. “Studios, including Paramount, are doing some things they wouldn’t normally do, because theaters are closed. Know: We remain committed to theatrical and believe a lot of this reverts once the world normalizes. But we do believe theatrical windows will probably shorten and some of these new monetization paths, including both strategic ones and others, probably will become more [common].”
The historic Universal-AMC agreement will allow the studio’s movies to be made available on premium video-on-demand after just 17 days of play in cinemas, including three weekends. That shatters the traditional theatrical window of nearly three months before studios can make movies available in the home.
It initially covers AMC’s U.S. locations, but the two partners will also discuss a potential international rollout. AMC, the world’s largest theater chain, will share in the revenue from PVOD, but the two sides haven’t disclosed financial details.
NBCUniversal CEO Jeff Shell last week called the AMC partnership “groundbreaking,” reiterating PVOD was a “complement rather than a replacement for a robust theatrical release.” He commended AMC and CEO Adam Aron for their vision that “together we can build a new, more attractive business model for us both.” Shell also signaled that Universal was hoping to reach similar deals with other exhibitors.
Discussing the impact of the pandemic on productions, Bakish said Thursday that late-night hosts Steven Colbert and James Corden are scheduled to return to their studios next week without audiences. Overall, he said the company was using a “phased approach” to restarting productions “based on geography, show format, in-studio versus location-based productions” and other factors. “Things are ramping up.”
Tyler Perry just finished production on the new season of Sistas for BET, while Paramount Network’s Yellowstone is about to start filming season 4 in Wyoming, and Nickelodeon recently began filming a live-action show in Canada, he noted.
Concluded Bakish: “We have a pipeline of productions moving towards starting and are optimistic that volume will grow, ensuring we have fresh product on the air in the fall.”
Bakish on Thursday’s earnings call did not provide any major update on planned asset sales. The novel coronavirus pandemic led ViacomCBS earlier this year to pause two planned divestitures, for which it was believed to be eyeing price tags of $2 billion to $2.5 billion on a combined basis, with the cash proceeds expected to go toward paying down debt. They are the sale of book unit Simon & Schuster and Black Rock, the CBS headquarters in midtown Manhattan.
Bakish was joined by CFO Christina Spade in what was her final earnings call. ViacomCBS recently hired Amazon executive Naveen Chopra as its new CFO, who will be starting next week.
