Paramount Earnings: Can Ellison Strike The Right Balance? [Parrot Analytics]

Saturday, 9 November 2024, 2:41 pm
Press Release: Parrot Analytics

Paramount Global, the legacy media firm most dependent on traditional Pay TV revenue, is set to report earnings on Friday amidst an optimistic market environment.

Paramount’s Skydance deal may advance faster now due to impending federal regulatory changes, giving David Ellison and his leadership team more time to formally strategize on the company’s future. 

Skydance/Paramount’s challenge and opportunity lie in balancing its legacy strengths — led by CBS series and the NFL — with a robust streaming future, maximizing the value of its existing assets.

Streaming Questions

Since rebranding in 2021, Paramount+ has grown its subscriber count and narrowed its financial losses, but it remains a modest player compared to the streamers backed by Netflix, Disney and Warner Bros. Discovery. It’s in fifth place in global demand share for originals, and seventh place in total on-platform demand with US audiences.

Despite this limited scale, the company’s streaming originals have achieved notable success. In Q3 2024, Paramount+ originals accounted for 4.7% of global demand share with only 2.0% supply share. This 2.29x demand-supply share ratio trailed only Apple TV+ (2.92x) for the quarter. Paramount+ may have untapped value in original content, including hit franchises like Star Trek and creator Taylor Sheridan’s numerous series, which consistently drive subscriber engagement and acquisition. 

With many competitors achieving scale through strategic alliances or bundling (e.g., Comcast's Streamsaver and the Disney-Max bundle), Paramount+ finds itself outside these ecosystems. This lack of bundling participation could limit its growth or, at the very least, cap its retention potential. 

Licensing Strategy

Paramount’s approach to licensing is a notable lever for monetization. Some of its original content, especially CBS series, thrives on third-party platforms. Paramount Global was responsible for 6.3% of Netflix’s TV catalog demand in September 2024 — more than any other TV competitor. This content helped Netflix retain 2.5% of its total subscribers and generated 2.7% of the platform's revenue in the UCAN last quarter. This Streaming Economics data could help set the stage for future Paramount Global licensing revenue growth.

On the other hand, if Paramount were to make Yellowstone exclusive to Paramount+ after its licensing agreement with Peacock ends, it could gain substantial subscriber acquisition benefits due to the show’s high subscriber attraction potential. Parrot Analytics Content Valuation model reveals that had Yellowstone been available on Paramount+ in Q3 2024, it could have been the second-highest acquisition driver on the streamer, contributing 2.94% of subscriber growth.

Striking the right balance between licensing revenue and SVOD exclusivity will be paramount for the incoming Skydance team.

Looking Ahead

This earnings season has seen legacy media CEOs reevaluate their linear assets and vast content libraries, publicly signaling strategic shifts in an ever-evolving landscape.

Paramount’s strengths in original content and licensing potential provide valuable assets as streaming and Pay TV converge. However, Ellison and team will need to revitalize blockbuster IP. While Star Trek has excelled on Paramount+, it hasn’t had a theatrical release since 2016, and the Transformers and Mission: Impossible franchises have limited long term upside.

Expect new ownership to refine Paramount’s streaming strategy, balancing in-house exclusivity with licensing and strengthening competitive positioning — with closer ties to the NFL and fresh IP initiatives.

Yellowstone on Paramount+

• Parrot Analytics’ Audience Journeys analysis can assess how titles would perform on different platforms in driving subscriber acquisition and retention.
• Despite being a Paramount Network original, Yellowstone is infamously available on Comcast’s streamer, Peacock, in the US due to a pre-Streaming Wars era licensing deal.
• If available on Paramount+ during the third quarter of 2024, Yellowstone would have been responsible for 2.94% of US subscribers acquired to the platform. This would be second only to Star Trek: Discovery’s 3.59%.

Corporate Demand Share

• Corporate demand share is the most macro level view of the entertainment industry. It helps assess which companies have the most in-demand content to license as well as keep in-house to drive subscription growth/retention, and can effectively value a conglomerate’s legacy and library content in aggregate.
• Paramount Global remains in third place in this category, well ahead of a rising Netflix and declining NBCUniversal, but far behind leaders Disney and Warner Bros. Discovery.
• Paramount Global has been on a downward trend in corporate demand share — dipping from 12.0% in Q1 2024, to 11.4% in Q2 to now 11.1% in Q3.
• Licensing strategy will be a major story to watch in 2025 as legacy companies try to extract maximum value from their libraries as the profit margins from linear shrink faster than streaming revenues can grow to replace them.
• With the volume of scripted programming on broadcast TV declining, even the reliable CBS hitmakers may not provide as consistent support moving forward as the company is accustomed to.

On-Platform Demand Share

• While demand for original series drives subscription growth, library content is key for customer retention, an increasingly crucial element of all streaming strategies as the market matures and consumers are offered more choice and easier ways to cancel than ever.
• Paramount+’s share in this category did increase from 8.1% to 8.6% in Q3 2024, but the streamer remains stuck in a frustrating seventh place in the category. It has now been in seventh place for four consecutive quarters.
• In Q3 2023, Paramount+ was in fifth place at 10.2%, ahead of Disney+ (9.1%) and Peacock (7.9%).

© Scoop Media

Parrot Analytics

Global television demand measurement

Parrot Analytics is the leading global content demand analytics company for the multi-platform TV business. With the world's largest TV audience demand datasets, the company currently tracks more than 1.5B daily expressions of demand in over 100 languages from 200+ countries to reveal the content consumers engage with and watch the most across platforms.

As a trusted partner to some of the biggest media companies and content creators in the world, Parrot Analytics optimises content workflows in real time. The company's TV analytics products result in better production, distribution, acquisition and marketing decisions, as well as accelerated SVOD platform success.

Contact Parrot Analytics

• TV Analytics for Amazon Prime Video - The Boys
• TV Analytics for Apple TV+ - Defending Jacob
• TV Analytics for CBS - The Big Bang Theory
• TV Analytics for Disney+ - The Mandalorian
• TV Analytics for HBO - Game of Thrones
• TV Analytics for Hulu - The Handmaid's Tale
• TV Analytics for NBC - The Office
• TV Analytics for Netflix - Stranger Things