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Paramount Global boasts strong corporate demand, needs more scale to take on Netflix, Disney, and WBD

Following Netflix’s solid third-quarter earnings, all eyes are now on major legacy entertainment companies such as Paramount Global to assess the state of the industry.

Paramount Global faces questions about its ability to effectively monetize is wealth of highly in-demand content, from CBS procedurals that dominate streaming charts to 2022’s biggest movie so far, Top Gun: Maverick. Wells Fargo just downgraded the company’s stock, as the advertising market faces serious headwinds.

Paramount Global (12.4%) had the third-highest corporate demand share with US audiences in Q3 2022, trailing only Warner Bros. Discovery (17.9%) and The Walt Disney Company (19.8%). The company aims to carry the momentum from its strong linear TV operation over to streaming, where it continues to build up Paramount+ and free ad-supported streaming TV service Pluto TV. The future of Showtime as both a linear and OTT entity remains in flux.

While Paramount Global is in third place in corporate share, Paramount+ is in fifth place in total on-platform demand, and seventh in originals demand share in the US. That said, Paramount+’s originals demand share has now grown in four of the last five quarters, which has coincided with consistent subscriber growth.

As speculation about the next big media merger ramps up, Parrot Analytics’ data highlights one potential threat to Disney on the horizon. Corporate demand share data shows that a strictly hypothetical, regulatory environment notwithstanding, merger between NBCUniversal’s and Paramount Global’s media assets would create a company that accounts for 22.2% US corporate demand share, roughly three percentage points higher than Disney.

The Warner Bros. Discovery merger put it within two points of Disney in this category, but NBCU and Paramount combined would immediately leapfrog Disney as the dominant media company in the US in terms of cross platform audience demand for TV content.

US Corporate Demand Share – Q3 2022

  • Corporate demand share assesses the long-term viability of the top media companies as they look to consolidate their original content’s availability exclusively onto their own platforms.
  • This chart reveals the power of Paramount Global as a content creator for both its in-house platforms and as a licenser of content externally.
  • However, Paramount Global’s corporate demand share has been shrinking this year – falling to 12.4% this quarter, down from 13.1% in Q1 2022. The company previously maintained the second-highest corporate demand share for years, but the Warner Bros. Discovery merger relegated Paramount Global to third place.
  • Paramount still remains well ahead of its closest legacy media competitor, NBCUniversal, as well as pure play streamers such as Netflix. A strategic merger or acquisition in the future could reestablish the company as a fixture among the top two entertainment companies for US consumers.

US On-Platform Demand Share – Q3 2022

  • On-platform demand share is an indicator of which platforms are more likely to be a consumer’s default “streaming home.”
  • Paramount+ fell 0.1% from 8.3% of the US on-platform demand share in both Q2 and Q1. In that time, Amazon Prime Video grew by 0.6% to overtake Paramount+’s fourth-place ranking. This matters because surveys suggest consumers are willing to pay for three to four streaming services. Securing a top three ranking is crucial for a platform’s long term viability as a standalone streaming service.
  • Paramount Global still selectively licenses popular key titles such as Nick’s iCarly, Paramount Network’s Yellowstone, and CBS’ NCIS to rival streamers such as Netflix and Peacock. Should the company ever exclusively reclaim the streaming rights to these hits, we can expect their on-platform demand share to rise as is reflected by their impressive overall corporate demand share.

US Streaming Originals Demand Share – Q3 2022

  • Since Q1 2021, the total US demand for Paramount+ originals grew 75.6%, significantly higher than the growth rate of all non-Paramount+ streaming originals, which were up 57.6%.
  • This has been the result of a newfound focus on original series, led by Star Trek: PicardStar Trek: Strange New WorldsHalo1883Mayor of KingstownThe Offer and more.
  • Paramount+ is particularly leaning on writer/producer Taylor Sheridan, the creator behind Yellowstone, 1883, Mayor of Kingstown, as he is set to deliver the upcoming series 1923Tulsa KingLand Man and Lioness to the platform. Strategic partnerships with prolific creators — such as Netflix’s pacts with Shonda Rhimes and Ryan Murphy — can lead to a steady pipeline of buzzy content with affinity for exclusive titles on the same platform, increasing customer loyalty and subscriber retention.
  • Even with this progress, US demand share for Paramount+’s originals fell from 5.4% last quarter.

Global Originals Demand Share — Q1 2020-Q3 2022

  • CBS All Access officially relaunched with an expanded library as Paramount+ in March, 2021. Since then, the streamer’s share of global demand for original programming has increased from 3.8% to 4.2%.
  • However, the lack of a marquee release such as Halo or a new Star Trek series in Q3 caused its digital original global demand share to fall by 0.4% this past quarter.
  • Paramount+ is only available as an independent streaming service in a handful of countries, as opposed to the 130 countries that Netflix operates in. Elsewhere, it is accessible through third-party distributors and as part of SkyShowtime, a joint venture with NBCUniversal’s Peacock, throughout Europe. Naturally, this contributes to a smaller global demand footprint.

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