Paramount loses more than a quarter of its value, analyst believes they should "just quit streaming"

[Citiprime]

The latest earnings report for the company has major implications for the future of Star Trek, given that some Wall Street analysts are suggesting that Paramount shutter Paramount+. The numbers indicate the streaming service may not even get to a break-even point until 2027.

Paramount+ lost $511 million in the first quarter of 2023 versus $456 million in the same period in 2022. Paramount spent another $1.7 billion merging the Showtime streaming service with Paramount+.

From IndieWire:

The way Cahall sees it, Paramount+ is “fighting hard for fifth place” in the streaming wars behind Netflix, Disney+, Hulu, and HBO Max [soon just Max], and it’s competing with the likes of Peacock, Apple TV+, and Amazon Prime Video.​

Given these numbers and losses, some are suggesting the company should make "tough choices" and reconsider their entire strategy. People have been speculating for months that Paramount might pull back on green-lighting new Star Trek content or reconsider some of the options that were already on the table in order to cut costs. So this might have major considerations as to whether something like Star Trek: Legacy gets made.

Also, among the options that might be on the table might, potentially considering shuttering Paramount+ and instead of running their own streaming service with direct-to-consumer content, licensing their content to one of the major streaming services. This would make Paramount more into an "arms dealer" selling first-run rights to content like Star Trek off to Hulu or Netflix.

A more drastic measure would be shopping the entire entertainment division to one of the major streaming services and having it sold off in the same manner that Amazon bought up MGM's content for $8.5 billion, putting Star Trek in the hands of a new corporate master.

 

[fireproof78]

Bye-bye.

 

[Lord Garth]

I never went to B School, so I'll just take it as it comes. I already got what I want. I read the entire article. This is what else it said:

Paramount, led by CEO Bob Bakish, also took impairment charges of $1.67 billion in the first quarter, driven by its upcoming combination of Paramount+ with Showtime into a single U.S. streaming platform later this year. Earlier this year, it had said the integration would lead to a content impairment charge of between $1.3 billion and $1.5 billion in the first quarter, while forecasting $700 million in annual expense savings.​

“We’re going to focus on driving market-leading streaming growth, while navigating this dynamic macroeconomic environment. And know that the decisions we’re making will position us well for a path of streaming profitability, significant earnings growth and a return to positive cash flow,” Bakish told analysts on a morning call.
​

To make that less wordy and make it sound like English instead of Business-ese: Bob Backish is hoping a merger with Showtime this year will turn things around and boost their profits.

 

[C.E. Evans]

Aren't most streaming platforms losing money for their parent companies? Streaming is still a relatively young industry and there was an initial push for the big studios to invest in a ton of original content to get things rolling. Now that most platforms are settled in, they can cut back on producing original content and start making a profit with what they have. That doesn't mean that they'll stop making new content, but the amount and frequency of it will likely slow down (we may not see five ongoing Trek shows in the future, but maybe only three or four, IMO).

As far as trouble at Paramount--when has there not been trouble at Paramount?

 

[gweeps]

I predict Elon Musk will try to buy Paramound+. He's a fan. Hell, he even got a mention in Discovery.

 

[Kamen Rider Blade]

It's almost like the previous "Network" model of having your content everywhere was a better business model instead of having everybody become their own "Cable Provider".

It's absolutely asinine to think that re-creating existing infrastructure was going to be a cost effective business model.

And giving up on DVD's / Blu-Rays and not promoting it is stupid, that was a fundamentally solid revenue stream, but the greed for "Streaming" & monthly residuals is DUMB.

IPTV where you pay for the content you actually want to watch and nothing else is a far better business model that is sustainable.

 

[ananta]

It's almost like the previous "Network" model of having your content everywhere was a better business model instead of having everybody become their own "Cable Provider".

It's absolutely asinine to think that re-creating existing infrastructure was going to be a cost effective business model.

And giving up on DVD's / Blu-Rays and not promoting it is stupid, that was a fundamentally solid revenue stream, but the greed for "Streaming" & monthly residuals is DUMB.

IPTV where you pay for the content you actually want to watch and nothing else is a far better business model that is sustainable.

Yup, I don’t have any sympathy as everything was rooted in seeing how popular Netflix was and getting greedy. We’re definitely at streaming saturation now; people can only afford so much. The problem now is if they cut back new content they will lose subscribers and if they maintain or increase the current level of content they continue haemorrhaging money. Ergo, they’ll probably just push reality tv shit which is cheap to make but usually appeals to the masses.

Definitely not good news for Trek given how freakin’ expensive it is to make and how niche its appeal is.

 

[Takeru]

Definitely not good news for Trek given how freakin’ expensive it is to make and how niche its appeal is.

They immediately recouped the cost of Discovery season 1 before it premiered by selling the streaming rights to amazon outside of the US and Canada, there are other ways for Paramount to make money with Star Trek, even when the budget is high, there is a big interest in it internationally.

 

[Alexander Corrino]

I'm not surprised about any of this. Paramount+ has never been profitable, and the whole "we will make it profitable at SOME point, let's just throw out expensive Star Trek series after expensive Star Trek series, maybe this will get us enough subscribers" tactic was... weird at best.

 

[FederationHistorian]

The smart money for Paramount would be to put their egos aside and merge with Netflix.

• They have content library to offer and not just for classic shows. Specifically, they have original content that doesn’t get cancelled after a single season. Which Netflix subscribers would greatly appreciate after seeing many promising original shows abruptly end.
• They have sensible subscription plans to offer (why Netflix still doesn’t offer a yearly plan alongside their monthly plan in 2023 is beyond me).
• Netflix is bigger and in more homes and has been around longer. It’s the more established streaming brand, and hasn’t gone through a bunch of rebrandings (CBSAccess, P+).
• Of their competitors, MAX, Apple and Amazon aren’t going anywhere.
• Large Star Trek viewership on Netflix has already been proven to be viable with the original shows (TOS, TAS, TNG, DS9, VOY, ENT). So, DIS, PIC, SNW, LD, PRO and even Short Treks would find new viewers.

Then afterwards, all they have to do is stay out of the way. As the real drama over streaming services will be between Disney+, Hulu, and Peacock.

• Disney is a known brand, and D+ is international.
• Hulu is also a known brand, but doesn’t stream outside the US. And both partners involved (Disney and Comcast) want to buy it.
• Peacock is the new kid and also doesn’t stream outside the US. And if Hulu was bought by Comcast, it would be a question on if Hulu goes or Peacock goes.

 

[Alexander Corrino]

Eh, I don't know about the Netflix angle... I remember the international outrage VERY well when they yanked Disco off Netflix a few days before the new season was supposed to premiere. Not sure if Netflix will want to bother again.

 

[Citiprime]

The smart money for Paramount would be to put their egos aside and merge with Netflix.

While that might make some business sense, my only apprehension, as a viewer and fan, would be putting Star Trek in the hands of a company with a reputation of quickly canceling original dramatic content after 1 or 2 seasons unless it hits certain metrics within their algorithm.

 

[Sisko_is_my_captain]

P+ is a lousy streaming platform. I literally only pay for it for Star Trek. I've cancelled briefly two or three times between seasons.

Their content catalog is also patchy in places. I decided to try JAG and after season one, I found that season two was missing like half the episodes. Paramount owns Yellowstone (right?) but you can't see it on P+.

if they didn't make SNW and LD, I wouldn't even miss them.

 

[Oddish]

Mixed feelings. On the one hand, not a big fan of Netflix, which was suggested as a front runner to inherit Trek. On the other, I expect the new streaming service would have a PS5 app. I could actually binge watch again.

 

[C.E. Evans]

Paramount owns Yellowstone (right?) but you can't see it on P+.

Yeah, NBC swooped in and secured the streaming rights for Yellowstone just as it was becoming a hit. Good timing for Peacock, bad timing for Paramount+ (they wished they had those rights back).

 

[valkyrie013]

All the individual streamers will crash, there just hemoraging money. and we'll be back to 3 or 4 big streamers. Paramount doesn't have the back catalog to be its own entity.

 

[Citiprime]

Yeah, NBC swooped in and secured the streaming rights for Yellowstone just as it was becoming a hit. Good timing for Peacock, bad timing for Paramount+ (they wished they had those rights back).

It's part of the reason Paramount announced they're ending the main series and starting a sequel series rumored to be with Matthew McConaughey that they'll have the rights to.

 

[XCV330]

There will be further consolidation of the streaming services. That's inevitable. It's happened in every other new industry/market. Paramount will probably get gobbled up or merge at some point, but no one will say they didn't try hard.

 

[C.E. Evans]

It's part of the reason Paramount announced they're ending the main series and starting a sequel series rumored to be with Matthew McConaughey that they'll have the rights to.

I think it had more to do with Kevin Costner deciding to more or less quit the show and cause all sorts of BTS drama, because it's still the highest-rated program on the Paramount Network and probably would have continued otherwise. As far as Paramount+, the sequel shows to Yellowstone (1883 and 1923) have done very well there, well enough for yet another sequel series to be in the works.

 

[Kamen Rider Blade]

Yup, I don’t have any sympathy as everything was rooted in seeing how popular Netflix was and getting greedy. We’re definitely at streaming saturation now; people can only afford so much. The problem now is if they cut back new content they will lose subscribers and if they maintain or increase the current level of content they continue haemorrhaging money. Ergo, they’ll probably just push reality tv shit which is cheap to make but usually appeals to the masses.

Definitely not good news for Trek given how freakin’ expensive it is to make and how niche its appeal is.

The smarter solution was to forgo "Streaming Networks" and everybody combine into one IPTV like they should have and just everybody had their own portal with their own shows.

The dream of a Star Trek like Library where you access the exact show you want, and pay a few pennies to watch each episde is the right deal or buy it so that you can watch it whenever you want w/o having to pay.

That was the entire point of IPTV, but all of them saw the Netflix "All You Can Eat" Monthly Subscription Buffet and got greedy.

That model doesn't work at scale for long, especially with everybody competing against each other with massive budgets and dividing up the pie.

Hell, the Subscription Model itself is fundamentally flawed.

That's why the original IPTV where you pay for what you watch and how much data it costs to download was superior.