Future of Paramount+ among merger talks

[cal888]

The WB/Paramount merger and Paramount should quit streaming threads seem to have run their course, and now Skydance and Sony / Apollo are the most likely acquirers. With that in mind, how about a new thread?

Roy Price is a former Amazon streaming executive with, you guessed it, a Substack. He recently made a post asking "What to do with Paramount+?". Some highlights:

Plan A: Get Out of SVOD

The consensus view has been that P+ is subscale on its own. If you wind down the video service and license your content to others, you will, at minimum, double your cash flow from $2.4B to ~$5B just by not losing the money on the SVOD service and licensing your content to third parties.

Getting out of SVOD is the consensus, reasonable, point of view and I cannot fault it. Selling the TV assets as well, if possible, would leave one with a well-capitalized version of Paramount Pictures (and possibly Pluto).

If the company is essentially pared down to the studio, it will be best to follow a franchise/star strategy, which management already understands, having created Skydance. Netflix and Amazon can create middling films on their own, and they do. Films that are ok and that aspire to be ok are not going to drive distinctive outcomes for Paramount.

Could this see CBS Studios being sold? Or would CBS / Paramount legacy TV content be retained, only selling off the CBS network?

Plan B: Stay in SVOD But Focus

Paramount spends ~$8.3B annually on P+ and P+ lacks identity. My impression is that CBS makes what works for CBS and Paramount Pictures makes what makes sense for Paramount Pictures and then everyone just dumps whatever they have into P+ which therefore just becomes a bunch of random stuff with no identity. There are also a few original series mostly revolving around the Taylor Sheridan universe, but, all in all, it just doesn’t add up to a coherent brand that America understands and loves. Too bad. I am going to hold back here, but whoever conceptualized the strategic move of launching P+ in this way does not understand SVOD well. You will do best if you know who your target customer is and you offer them a brand.

No mention at all of Star Trek here.

Are there opportunities in SVOD that P+ has itself not explored? I would argue there is at least one. There is a fairly significant underserved gap in the market, which is some combination of comedy (The Hangover, Tropic Thunder, etc.), which just isn’t getting made except in the most anodyne and boring form, and what you might call just red stateish drama and action (think everything from Cannonball Run to American Sniper). This is a big audience that Hollywood doesn’t serve. There is no brand for this audience and nothing you can subscribe to. I do not think of this audience as “niche” or “fringe” at all. I think it is just the center of the American (and overseas) entertainment audience. Paramount already has CBS, South Park, and the Yellowstone spin offs. I presume it has a strong family film pipeline at Skydance. It literally has a deal with Walmart. Is it me or does this seem incredibly obvious?

Interesting to consider how that could impact the franchise...

The executive predicts:

I would vote for Plan B. I think it creates more value in the medium and long term and it fills a real gap in the market.

However, I suspect that Plan A, the “default option,” would be preferred by private equity investors and will prevail. It is, in the short term, lower risk

A lot could come down to if David Ellison is a Star Trek fan or not. Articles have talked about him being a genre fan growing up in the 1990s.

If he doesn't take a personal interest in it, it's easy to imagine Star Trek being farmed out to Netflix or Amazon.

 

[Boo-khat!]

A lot could come down to if David Ellison is a Star Trek fan or not. Articles have talked about him being a genre fan growing up in the 1990s.

If he doesn't take a personal interest in it, it's easy to imagine Star Trek being farmed out to Netflix or Amazon.

Him being a fan or not is irrelevant. If he is a good businessman, he would know that it is a viable property if done right ('right' being advertising the hell out of it and showing it on a platform that caters to the most people.) Whether he personally likes Star Trek or not shouldn't be a factor.

 

[cal888]

Him being a fan or not is irrelevant. If he is a good businessman, he would know that it is a viable property if done right ('right' being advertising the hell out of it and showing it on a platform that caters to the most people.) Whether he personally likes Star Trek or not shouldn't be a factor.

I'd emphasize the upsides of the possibility that he is a fan. Someone that actually gets Star Trek would be a major break, especially as many NuTrek critics would argue Kurtzman has mismanaged the brand.

 

[HellRod]

Someone that actually gets Star Trek

*Puts hand up*

Oh, oh, it's Terry Matalas right?

Right!?

 

[CorporalClegg]

*Puts hand up*

Oh, oh, it's Terry Matalas right?

Right!?

No.

 

[cal888]

So Sherry Redstone, Les Moonves, and Bob Bakish have done all done outstanding jobs? Kurtzman was the perfect bet?

 

[CorporalClegg]

You don't seem to understand who does what.

 

[fireproof78]

He produced content consistently and on time.

What more is needed?

 

[cal888]

Okay clearly there's going to be a lot of talking past each other here. Moving on...

He produced content consistently and on time.

Both DISCOVERY and PICARD went over budget and experienced reshoots. Instability in showrunners. Clear signs of budget cuts season to season. I realize CBS / Paramount spent a lot of other people's money (Netflix, Amazon...) but to have major trade articles and commentary from industry professionals come and go without mentioning the "success" of NuTrek despite the massive sums of money invested is telling.

 

[fireproof78]

but to have major trade articles and commentary from industry professionals come and go without mentioning the "success" of NuTrek despite the massive sums of money invested is telling.

So it's not a success?

Genuine question because I would want to know how we are measuring success here for Paramount+?

Is it just with Star Trek? Because, while it's divisive at times, we have a huge slate of different shows appealing to multiple aspects of the fandom.

Is it unique programing in general? Because Yellowstone seems to have some steam.

Is it market share? Well, we don't know that since streaming numbers have not been released as such.

A definition would aid discussion.

 

[HellRod]

No.

What!? How could it not be Him? He's the only one who clearly gets Star Trek.

 

[Boo-khat!]

The only one who gets Star Trek is me. Unfortunately nobody is offering me the job of showrunner. Maybe I'll send David my resume, even though I have zero television or movie production experience. But I'm still qualified, because I get Star Trek.

 

[Anson Mount Seleya]

He produced content consistently and on time.

What more is needed?

And more to the point, under Kurtzman's stewardship, Star Trek has become successful again. Oh sure, people will go on about the behind the scenes drama, Disco's constant turnover in showrunners, whatever. But the fact remains, if anyone who's opinion matters actually thought modern Trek was a failure, we would not have gotten the amount of Trek content we've gotten. And of the modern shows which have ended, two ran for five seasons each which by modern standards can be considered a full run, and one, ending in its third season did so voluntarily. There's no possible way any of that can be considered a failure.

Besides, it was Kurtzman who signed off on bringing in Lord Terry, Patron Saint of the Wank, so everyone who thinks Picard S3 was the only True Trek done since 2005 should realize they wouldn't have gotten even that without Kurtzman, or even without Disco S1 being considered a success. But of course, the Matalas Cultists don't like to be reminded of that.

 

[fireproof78]

And more to the point, under Kurtzman's stewardship, Star Trek has become successful again. Oh sure, people will go on about the behind the scenes drama, Disco's constant turnover in showrunners, whatever. But the fact remains, if anyone who's opinion matters actually thought modern Trek was a failure, we would not have gotten the amount of Trek content we've gotten. And of the modern shows which have ended, two ran for five seasons each which by modern standards can be considered a full run, and one, ending in its third season did so voluntarily. There's no possible way any of that can be considered a failure.

Which is why i think we need to have such a conversation around defining what is a success. If the current tenure is not a success, by what marker are we declaring it so? And more importantly, how would a new leader create a success? What does it look like?

More Trek? Less Trek? More movies? More live action? No animated? Goal posts need to be clear for this discussion to be meaningful.

 

[Anson Mount Seleya]

I suspect the anti-Kurtzman crowd would consider anything other than a faithful recreation of TOS done with 1960s production values yet also somehow using deep fakes of the original cast to be a failure.

 

[HellRod]

Kurtzman gave me Strange New Worlds, which makes him alright in my book.

Everything else is just gravy of varying degrees of quality.

 

[Mudd]

The people who buy Paramount will not be stupid enough to replace the people running Star Trek.

 

[F. King Daniel]

So it's not a success?

Genuine question because I would want to know how we are measuring success here for Paramount+?

Is it just with Star Trek? Because, while it's divisive at times, we have a huge slate of different shows appealing to multiple aspects of the fandom.

Is it unique programing in general? Because Yellowstone seems to have some steam.

Is it market share? Well, we don't know that since streaming numbers have not been released as such.

A definition would aid discussion.

The streaming bubble is bursting, nobody's making any money and all services are in the same boat, making cuts where they can.

And speaking of reshoots, pretty sure Disney just reshot the entirety of their Daredevil series, and their movies have been tanking also.

 

[Mudd]

Netflix blows past earnings estimates as subscribers jump 16%
Profit margin: 25% (up from 16% in 1Q 2023). The increase in margin was driven by higher revenue.

 

[UssGlenn]

If the Skydance merger happens I think the most likely outcome is Paramount+ shuts down and they just make content for CBS, Movies, and other streaming services. Where any particular new Trek series ends up is a crapshoot. However I suspect the finished series will eventually end up on one service (Netflix). Movies will probably always hop around. New shows probably end up on CBS, Netflix, or Apple, possibly Max, Disney unlikely.