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After giving an address at the Edinburgh TV Festival on Thursday, previewing some upcoming content and discussing the state of the streaming market, Paramount’s David Nevins sat down with The Hollywood Reporter, sharing his thoughts on the growth challenges that the likes of Netflix have been facing as of late and how Paramount’s strategy differs from others in the industry.
In the conversation, the executive — whose title is chairman and CEO, Paramount Premium Group and chief creative officer, Paramount+ scripted series — touted the importance of striking a balance between the streaming and traditional businesses and leveraging existing Paramount franchises and brands for original content.
With Netflix losing subscribers in the first half of 2022 and an increased focus across the industry on making streaming businesses profitable, there has been much focus on whether and how companies have to scale back or change their streaming and content strategies. Do you feel you have to change your approach in any way?
We are in an earlier stage in our life cycle. We are still expanding into new markets. Last year was about getting Paramount+ up and running and trying to create a brand. We launched in Latin America, Mexico, Australia, Canada. This year, we are rolling out across Europe with Paramount+ and SkyShowtime, which I’m heavily involved in [as a board member]. It is a balance, trying to figure out how to be aggressive and make smart investments, take advantage of the franchises that you already own where you are already strong, but building on the new things. There is a lot of balancing to be done. How much is prudent to invest? People want to know your path to profitability, and so we pay close attention to that. How much local versus how much sort of global do you want to do? We have always been selective, we never throw the kitchen sink at things. So I’m sort of used to operating in an environment where you got to make your shots count.
Warner Bros. Discovery has shut down local production efforts for HBO Max in parts of Europe. How do you think about local originals versus a global focus?
If we make a big investment in a show in the U.K., I am not doing it just for the U.K. I am doing it because I think it can also do business in the U.S. and it can do business in Australia and Canada and France and Germany. The U.K. is among the countries that are known to make exportable stuff. We got to make stuff that is exportable.
Is the TV and streaming business becoming more like the movie business in that you focus more on franchises and brands that people recognize? At Showtime, you have Dexter: New Blood, at Paramount+, you have such series as Grease: Rise of the Pink Ladies and American Gigolo coming up…
You want to find a balance. You want to make sure that you are doing a great job of developing your franchises, making your IP count. So that can be SpongeBob, it can be Yellowstone. That can be Dexter, it can be Grease. But you also want to be trying to find the next new thing. So if you think back to last Christmas, on Showtime we were using the return of Dexter to shine a light on Yellowjackets, two shows that have a little bit of horror, a little bit of comedy. They are both a little upsetting, but also kind of fun. So they had weird tonal overlaps. But you use a piece of established IP to establish the next big one. And Dexter started up here and stayed up here [he gestures]. And Yellowjackets started down here, but started moving up rapidly, and that is when you are really firing on all cylinders. Halo benefited by being on the streaming service that already had Star Trek – those two cohorts worked together. Yes, Halo was established as a video game, but it was new IP for [a series]. So, again, I think that is one of those Goldilocks things where you want to find the right balance, you got to be generating the next new thing while doing a smart job and reinventing something. That is what happened with American Gigolo. It was a title in the Paramount library. But I think it will make for a very interesting premium television show.
Whether an existing franchise or new concept, is it fair to say you would rather develop something that can live on for more than one season?
What are some of the other Paramount franchises and brands that you can see developing for Showtime or Paramount+?
I am not going to say. There are a lot of things that I am working on. I don’t want to mention things until they are ready. There are a lot of things. What is the future the Dexter franchise? I am actively working on that. [Among things in production,] Fatal Attraction is more in the American Gigolo vein, it is a title with themes that are relevant today. If you have a good drama that deals with complicated marriage, infidelity issues, you know those are themes that are timeless and resonate. There was one expression of it in the ’80s. And there is going to be another expression of it in the 2020s.
When you think of Halo, do you think of it as a five-season or 10-year franchise or something like that?
There are a lot of different ways you can go. It is also enormously franchisable. There are so many different games. It has got so many different directions. Yes, [we are] starting to think about that as a franchise, absolutely.
Do you think about other games as potential content franchises?
It has been a very fruitful collaboration with Microsoft. And so there are other things that we are constantly thinking about.
Do you think about potential acquisitions of content brands or things like Starz as a way to add more franchises to your funnel?
That is not my purview. I do try to think about content. And there are enormous resources within the company in between the CBS library, the Paramount library, the various brands that fall within that. There is an enormous playing field. And so, that is where my focus is.
Do you focus content bets on tentpoles or do you also look for lower-cost projects?
I believe in real variability of costs. You want to have some shows that feel big and can play on the biggest scale. But I think there will be an enormous carrot for producers that figure out how to make great drama at a lower price point. And we are actively working on that. They can’t all be $10 million-plus. You can only do a certain number at that level. And we got to be figuring out how to make modestly budgeted [fare]. I am actively working on that. There will be great rewards for producers to figure out how to do that.
You have cast Ewan McGregor in A Gentleman in Moscow for Showtime in the U.S. and Paramount+ internationally. And VIS, the international studio unit of Paramount Global, is working on that. Do you expect VIS with its presence in various international markets to do more for you and what does that mean?
I am working with them a lot now, not just in the U.K., but in other regions as well. There are a lot of production resources around the world and local production bases in different parts of the world. We are going to have a big hit that didn’t come out of the U.S. in the very near future.
Do you expect to be looking to cut costs whether in a latest adjustment after the CBS-Viacom merger or for other reasons? Netflix has been making changes when it hit subscriber growth challenges…
We have been pretty balanced. We are used to running a tight ship. So we had the ability to make adjustments along the way. We have never gotten so bloated that we have to do the massive cutbacks. But you know, when there are challenges in the ad market, you pay attention and watch costs.
How has Paramount+ been doing here in the U.K. since the June launch?
We are finding receptiveness to the concept of Paramount+, it is a compelling offering. It has done way better in the U.K. and Ireland than we had sort of planned for. So there is room for new streaming services. It is not a zero-sum game. There is not going to be one winner. People are going to have multiple services. And depending on how much discretionary income, you will have two or three or four, you may go in and out when your favorite show is on.
Anything you never get to talk about that you feel is important to highlight?
I think that we are approaching [our streaming rollout] in a smart way by launching with Sky in the Sky territories, U.K., Germany, Italy etc, and with Canal+ in France. And in the rest of Europe, we have this joint venture in SkyShowtime with Comcast and NBCUniversal. So we are doing it in a way that allows us to start with an immediate base, but also go direct-to-consumer. So, we are rolling out across the world in a sort of careful, cost-efficient way. And I don’t know that that international strategy has gotten the recognition. We are not just trying to turn on the whole world at once, we are rolling out strategically and with strategic launch partners. I think that will prove to be a good strategy. Some of the moves that we are making in terms of how we do it – we are playing the game differently than the other guys are.
During your keynote appearance earlier here at the Edinburgh TV Festival, you mentioned that Showtime has a Louis C.K. documentary in the works, which will also explore the broader state of #MeToo. Anything more you can say about this doc at this stage?
It hadn’t been announced before, so I will leave it at what I said in there earlier.
How has your interaction with the Paramount TV studio been changing and what might be next now that you oversee it?
It is now in my purview to work closely with [Paramount TV boss] Nicole Clemens, who has been a great leader. We are going to continue to be suppliers to third parties. We have got good business at Apple and Netflix, at Hulu. So will continue to be a third-party supplier. But Paramount Studios is also making its first Showtime production in American Gigolo and is going to have a big year next year with Fatal Attraction and Grease at Paramount+.
With subscriber growth stalling for Netflix and others, there has been a sense that the big streaming growth may be coming to an end, some may even say the streaming sky is darkening. What’s your take?
There was never any illusion that there was an infinite market and infinite TAM, total addressable market. That was not news to us that there is a limited number of people on Earth, and not everybody can afford an infinite number of streaming services. So that is not news. Now, we are getting back to a rational world where you have to compete, you have to have good content, you have to have a good product. We are starting to get rewarded and get credit for [advertising-supported streamer] Pluto TV where we were early to free, ad-supported streaming. Now, everyone is sort of copying that. We are offering it at different price points, we are going to have flexibility, we are going to be good partners with some of the big platforms of Amazon and Apple and Roku. So, flexibility is the key. And by the way, the fact that we have all these linear channels, in 180 countries in the world, that is a good business, too. So it is not all about streaming. But I still believe streaming is the future, and so we intend to be a real player. So streaming is a key element of the future media ecosystem. It is not the only element of the future media ecosystem. The sort of the idea that it is going to be all streaming, you should burn the furniture to go all into streaming, I knew that was not right. We have strong businesses that throw off a lot of cash that are very profitable. And we are using them to fuel our streaming rollout. And I think that is the right strategy.
How do you feel about making streaming content available for binge-watching versus episodes rolling out over time?
We will do both. I have experimented with some of the unscripted stuff where we put all out. We put out all of We Need to Talk About Cosby at once, and that had a significant impact in the U.S. But in general, there are advantages to building the word of mouth in the way that Yellowjackets built word of mouth, episode by episode, Halo built word of mouth episode by episode. I would not have wanted to dump all of Halo at once and have not wanted to dump all Yellowjackets at once. And I think you will see some of the binge advocates start to come back to a certain amount of weekly drop.
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