8 Questions for Paramount - the Would-be Streaming and Ad Titan
From a media and ads perspective - where might all this be headed?
David Ellison is clearly not screwing around.
The new media mogul has deep pockets and huge ambitions - and seems on a mission not only to build a new/old media empire, but maybe even challenge the current tech titans, even as they threaten to swallow up the entire media and advertising industries. Let’s review what’s happened so far, since he assumed control of Paramount - and try to suss out where things might be headed from a media and ads perspective:
Paramount inked a $7.7 billion deal for live streaming rights of UFC events for seven years
The company pulled the Duffer Bros.( Stranger Things) away from Netflix
They re-signed the South Park guys as well
Paramount is closing in on buying Bari Weiss’ Free Press and significantly revamping CBS News
Ellison wants to buy Warner Discovery
His family may be a driving force in buying/creating a US-centric version of TikTok
That’s a lot - and this series of events is awfully refreshing amidst all the recent Big Media Retrenchment. But does it mean that Paramount is the next Amazon, Apple or Google? Not necessarily. So, I tried to think through where might things be headed:
What exactly do you do with streaming?
As I’ve written about recently, the Paramount+ experience is nightmarish from a tech and UI perspective. To me, it feels incredibly urgent to fix that app if Paramount wants to be taken seriously in the streaming sector, among talent, and certainly advertisers. But, what happens if you are about to buy Warner Discovery? Do you wait out a likely very long approval and integration process, and launch a new combo app that brings together Paramount+ and HBO Max? Is the tech from either salvageable?
Would a new HBO/Paramount app service instantly become a viable player? The Streaming Wars are seemingly over - with Netflix and YouTube the declared winners. If you look at Nielsen data, Paramount-plus-Warner gives you roughly a 3.4% share of TV viewing - which is better than Roku, but less than Amazon today. To be sure, one would think that a bigger, better, richer app would be able to attract more subscribers, and command more time spent through cross-promotion and by simply having more stuff to throw in a recommendation engine. Yet it would seem that Paramount would still have to up its content volume to actually make a Netflix nervous - assuming that’s the goal.
What about Peacock?
This new super app (ParMax?) would seem to leave the NBCU streaming service naked. Could Ellison convince Comcast to maybe roll Peacock into ParamountMax? Or create an irresistible bundle?
Does Paramount go bigger on streaming advertising - or start to outsource it? I’ve written about this recently - Ellison, unless I’ve missed it, doesn’t seem to be talking up the ad business a whole lot. Now, Paramount+ with HBO Max would provide brands with an attractive, premium ad vehicle - however a lot of those current subscribers are paying to not see any ads. Paramount might have to play around with pricing models to make the ad tier more attractive (especially to core HBO subscribers). In terms of bringing CTV ads to market - I could see Ellison maybe consider a deal with an Amazon to bring its targeting data to bear and handle some or all of Paramount’s streaming inventory aside from sports. Crazy?
What to do with Pluto?
A couple of years ago, the free, ad-supported Pluto was trending toward commanding 1% of TV viewing. More recently, it doesn’t show up in the Nielsen gauge ratings. Something’s off, because during that period, Fox’s Tubi has been ascendant. To be fair, Paramount has been a bit distracted with merger stuff. You could theoretically fold Pluto in to any new streaming service, which would help ratchet up a ParamountMax’s ad avails. Yet at the same time, that could cause lots of consumer confusion on pricing. And does having a FAST option keep Paramount in some ad conversations (like with small brands) that it might otherwise not get to play in?.
What does TikTok bring to the table?
Buying a short-form, mobile platform like TikTok is exactly the kind of thing we like to tell traditional media companies they should be doing to survive and evolve - putting aside the impossibility of pricing, or even a willingness to sell among Silicon Valley types. Which makes TikTok so unique. This whole situation is so fluid - (at the moment it’s not clear that Paramount would control TikTok outright, or it might be part Oracle, part News Corp., etc.). What sort of actual synergies could a Paramount/TikTok combo truly unlock? Yes, you could put together big combo ad packages. Could the TikTok algorithm help better inform Paramount’s own recommendation engine? Make it more social? Could you see a short-form experience of some kind on ParamountMax? Would that even make sense?
What to do about YouTube?
Even if Ellison goes all out, puts together an IP and streaming powerhouse with the combination of two or more media giants - he’s still staring at YouTube’s TV/time share growth, and a generation or three’s preference for creator content. Does he try to compete in any way by opening up his doors to UGC? Or by courting creators? Could Ellison even go crazy and try to buy up one of these emerging creator studios - like a Dude Perfect or Dhar Mann? Those ideas sound crazy, but so is Oracle maybe buying up a Chinese app that was supposed to be a national security threat not too long ago.
Would Batman be in the next Top Gun? Hear me out…
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Pluto is till over 1%. Just like other major media companies combined their streamers, Pluto and P+ we're combined in Nielsen Gauge under Paramount months ago.