How to Fix Paramount+ (Plus HBO Max)
(hint - might be time to start all over again)
Apparently, $110 billion gets you about 3.7 percent.
That’s the share of TV viewing you get if you combine the streaming audience for Paramount+ and Warner Bros. Discovery - according to the most recent U.S. data from Nielsen’s The Gauge report.
Now that it’s official that Paramount plans to merge WBD’s core streaming app HBO Max with Paramount+ (whenever this deal finally closes, which could take six to 18! months - two upfronts!), it’s time to consider the prospects of the combined service. On the surface, the unified offering doesn’t seem to exactly reignite the Streaming Wars, given that Paramount Max still won’t be within half of Netflix’s share, forget about YouTube.
(Yes, I realize this deal is about way more than streaming apps. Movie studios, TV networks, blah, blah, blah).
While Paramount officials seem bent on keeping the HBO brand and its programming leadership (which doesn’t sound like that will be confusing politically, or for consumers), a single app is the way to go. As for where to start, well, as my 12-year-old said, “oh great, two of the wonkiest apps are coming together” - clearly HBO Max has the better tech, while Paramount is likely to be the lead brand.
Regarding the current Paramount+ app, I’ve made my feelings clear in the past. If it’s possible to burn a streaming app in the fireplace, that’s what should happen.
But the answer isn’t just - let’s just fold things into the superior HBO Max streaming tech. I’ve long wondered when one of the major streamers would be able to catch up and be at least as good as Netflix and YouTube in terms or user experience, discovery, recommendations, etc.
In this case - Paramount shouldn’t just try to catch up - it’s time to start over, and maybe even lead.
After all, CEO David Ellison has said repeatedly that Paramount wants to operate like a tech company. The new streaming app - whenever it arrives, should epitomize that.
What would that mean exactly? Well, for starters
The app should actually launch (Paramount+ often doesn’t), and search and discovery need to be much more seamless.
Obviously, Paramount needs more content volume. HBO Max and Paramount+ have the same problem - both actually have great shows that lots of people binge when they’re in-season, and that’s it. “Both of these services are generally, lightly watched,” said Rich Greenfield, partner, on The Town earlier this week. “Neither of them have dramatically grown their viewership.”
Time to steal some tips from TikTok. They are part of the family now. Whether that means integrating some short form, a ‘for you’ option, it’s time to cross-pollinate.
Embrace the algo. At a recent ad industry event, there was a lot of talk about the growing power of algorithm-driven recommendations engines. Yet most streaming services seems to be using more standard ad tech and targeting to serve ads - rather than letting those same engines surface ads to people, based on things they like or have responded to. Shouldn’t the new Paramount+ do that?
From an ad perspective, former Freewheel CEO Doug Knopper suggested that Paramount lean on their new WBD brethren. “They are one of the more sophisticated ad platforms out there. I will be curious to see what the acquirers do to that. My sense is they would need to start using AI modeling to better understand their viewers and serve relevant/attention grabbing ads that drive behavior. There is a big opportunity here to fix the ad serving/creative platform for media companies.”
Along those same lines, Sam Bloom, head of partnerships, PMG has talked about how rather than having ads targeted to individuals, creative ‘finds’ users on platforms like Meta. There is a huge opportunity for someone to figure that out in TV. Maybe the new Paramount Max could?
“At some point, you have to wonder if one of these services is going to run all of their content through AI, along with tons of advertiser data, and be able to say to brands, ‘we know your consumers better than you do.,’” Bloom said. “That’s the opportunity here.”
Bloom wondered if Paramount/Max might elect to follow Netflix’s recent move - where the company started out by partnering with established ad tech companies, ultimately to realize it need to build its own. “Or, they could follow the NBCU playbook [owning Freewheel and Beeswax] and saying, we’re going to build or buy our own full stack.”
One problem - you need a lot of ad volume. Does Paramount+ open up the floodgates to smaller brands using generative AI by buying someone like MNTN or Vibe? It’s not crazy, but the company would have to figure out how to go all in with smaller brands but still protect the premium, upfronty nature of selling the NFL, “Landman,” “Game of Thrones,” etc.
Regardless of the how, there is a rare opportunity here to reset streaming for consumers and advertisers. Is Ellison up for it? Can you make that kind of investment when you are trying to cut billions in the name of synergy?