What exactly is Paramount doing with its streaming services?

In today’s topography, Paramount Global has a mountain of streaming platforms. This time next year, the portfolio may amount to a mountain of beans.

Most of Paramount Global’s streaming services are on the upswing: the Showtime app will shut down in September when it fully integrates with Paramount+. A majority stake in BET Media Group, which includes BET+, is in the process of being sold, attracting high-profile potential buyers including Tyler Perry, Byron Allen and Diddy. Also for sale is Noggin, basically the company Nick Jr.-junior by streaming brand a Wall Street Journal.

In March 2021, the struggling CBS All Access became Paramount+, and by the end of 2022, Paramount+ will boast “nearly” 56 million subscribers. Linear and streaming Showtime, along with BET+ and Noggin, added about 21 million more subscriptions. (That’s mostly Showtime. Paramount doesn’t hand out the numbers for BET+ and Noggin, and can you blame that?)

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Those three represent 60 percent of Paramount’s streaming brands, but they are by no means the majority of the streaming business.

All told, Paramount’s streaming subscribers have grown 2.5 times in those two years — the vast majority for the basic service, which now runs as Paramount+. During that time, as Viacom’s cable business began to decline (with the exception of the random Paramount Network’s single “Yellowstone”), it became clear to management what was a viable business worth investing in and what was just another streaming service. Now is the time for cost-cutting to respond to cord-cutting, and things will look very different.

The Showtime brand will live on through a million “Dexters” and a billion “Billions.” The most expensive Paramount+ option, which includes Showtime linear and Showtime programming, will be renamed “Paramount+ with Showtime” and will be even more expensive.

A big chunk of Paramount streaming is about as expensive as it gets: free. At the end of 2022, Paramount’s ad-supported Pluto TV reached nearly 79 million monthly active users and is the market leader. It might be tempting to fold Pluto into Paramount+ as a free entry-level option, though even rival NBCUniversal’s Peacock is moving away from that approach. The Pluto TV brand is strong enough to operate on its own, and insiders say there are no plans to integrate it into Paramount+.

Paramount+ with ad-supported and ad-free tiers is not yet profitable. In 2022, direct-to-consumer revenue grew by 47 percent, but costs outpaced growth by 56 percent. Spending on content isn’t going down yet; Last year, Paramount spent about $4 billion on streaming content, and Paramount Global CEO Bob Bakish believes streaming spending will peak this year. Operational efficiency is another matter; With the Showtime integration, Paramount Global CFO Naveen Chopra said the combination of services and personnel will result in a write-down of $1.3 billion to $1.5 billion in the first quarter of 2023.

How to increase revenues, control expenses and become more efficient? Get rid of — and get a few bucks from — your dead weight.

Nathan Bolster/BET

According to the WSJ, the sale of a majority stake in Noggin (which currently airs Nickelodeon’s children’s shows such as “Paw Patrol” and “Peppa Pig”) is to increase the brand’s revenue potential. Paramount wants to sell control to a party that wants to turn it into an interactive learning platform, with the studio retaining its stake.

A Paramount spokesperson confirmed to IndieWire that it is accepting offers for a majority stake in BET Media Group, which includes cable channels BET and VH1, as well as BET+. A spokesman declined to discuss a possible sale of Noggin.

There’s also the possibility that Paramount as a whole is for sale: Bakish has repeatedly said that making it an attractive target for potential acquisitions is a priority in any major corporate decision. The potential buyers: There’s NBCU’s parent company, Comcast, and tech giants Apple and Amazon have virtually unlimited resources. Media consolidation, like the streaming wars, may be just beginning.

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