Can Paramount Compete With Netflix and Disney?

Rich Greenfield, a co-founder and analyst at LightShed Partners, a research firm, is skeptical that Paramount can survive on its own. Paramount’s streaming business is growing quickly, but it’s still not profitable, Mr. Greenfield said. And much of the audience for Paramount’s signature content — think MTV and Nickelodeon — has shifted to new-media platforms like TikTok and Instagram.

“I don’t think there’s anybody who believes that in five years, this company won’t either have bought other things or become part of something larger,” Mr. Greenfield said. “It’s eat or be eaten time.”

In recent weeks, Wall Street has put a sharper focus on the profitability of streaming businesses. Netflix said in April that it lost streaming subscribers in the first quarter of the year, reversing a decade of growth and causing its stock to tumble. Mr. Bakish said that competitors like Netflix — which he cheekily calls “legacy streamers” — are only now coming around to the importance of the revenue strategies Paramount has embraced for years, including advertising.

The box office, another traditional business largely eschewed by Netflix, is another example, Mr. Bakish said. “Top Gun: Maverick,” is on pace to generate $150 million in ticket sales during its opening weekend, but, in an exception to most movies produced by the studio, it won’t appear on Paramount+ within the typical 45-day window.

Still, some experts think Paramount’s strategy is sound. Brett Feldman, an analyst for Goldman Sachs, said that the global market for streaming subscribers is far bigger than the audience for pay-TV subscribers. Paramount+ added 6.8 million subscribers in the first quarter of 2022. Mr. Feldman is in the minority of analysts who have a “buy” on Paramount.

“Not everybody pays for cable, especially outside the U.S.,” Mr. Feldman said. “Most people have an internet connection or cellphone to stream video.”

Article source: https://www.nytimes.com/2022/05/29/business/media/paramount-streaming.html