Paramount Earnings: Previewing The Ellison Era

Friday, 9 August 2024, 8:36 am
Press Release: Parrot Analytics

With Paramount Global reporting its first earnings since announcing the Skydance Media sale, it’s important to review what the company’s future leader David Ellison will be receiving in the $8.4 billion agreement.

The billionaire scion is a proven hitmaker with the Mission: Impossible franchise as well as Top Gun: Maverick. Hollywood views his future stewardship of Paramount — likely to become official in mid-2025 — with optimism (though Wall Street is indifferent as Paramount Global’s stock is down 6% in the last month since the announcement).

As of Q2 2024, here is where Paramount Global stands with US audiences:

Paramount Global Corporate Demand Share: 11.4%, 3rd place
Paramount+ Total On-Platform Demand Share: 8.1%, 7th place
Paramount+ Streaming Original Demand Share: 5.7%, 6th place

Ellison will be taking over a high value library, as well as Paramount+’s 70M+ subscribers. He’ll need to weigh fundamental questions such as what his streaming and licensing strategy will be, how to best leverage sports rights — especially the NFL on CBS — and even whether he wants to keep the company public or not.

First, a look at which Paramount brands are over performing with Paramount+ audiences should help the new ownership with priorities:

Paramount+ Supply and Demand

Linear TV is a shrinking business, and lowering debt is a key initiative for today’s entertainment conglomerates.
Only three Paramount Global brands over-perform when we look at the share of audience demand they generate on Paramount+ compared to supply.
Two of these are linear staples: Nickelodeon, and CBS. The kids shows on Nick and CBS’s industry-leading sitcoms and procedurals should clearly be part of the the long term strategy of Ellison’s Skydance owned company. This doesn’t even take into account the importance of the NFL on CBS, so maximizing the profitability of CBS needs to be a key part of Ellison’s plan. TV media accounted for a whopping 68% of the company’s revenue last quarter after all.
The surprise standout here is Paramount+ Originals. Largely led by Taylor Sheridan series and the Star Trek universe, these original series are over-performing with demand vs supply. This suggests there is value in continuing these franchises, whether on an in house platform or licensing them elsewhere.

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 NBCUniversal and Netflix, but significantly behind leaders Disney and Warner Bros. Discovery.
Paramount Global dipped slightly in Q2 2024, from from 12.0% in Q1 2024.
Licensed programming from Paramount accounted for a 12% demand share among Netflix’s U.S. TV catalog in Q2 2024. After the company’s licensing revenue dropped 25% last quarter, partially due to the 2023 labor strikes, this division may ramp up once more with stable leadership and direction.

On-Platform Demand Share

While demand for original content drives subscription growth, library content is key for customer retention, an increasingly crucial element of all streaming strategies as consumers have more choice and easier ways to cancel than ever.
Paramount+ (8.1%) has now finished behind Peacock (8.9%) in this category for three consecutive quarters. Peacock was consistently in last place of the major streamers in on-platform demand share until Q4 2023. It’s worth remembering that Paramount Network’s smash hit Yellowstone is still streaming on Peacock due to a late 2010s licensing deal.
Paramount+’s total catalog demand share has shrunk dramatically year over year, down from 11.2% and fifth place in Q2 2023.
Furthermore, Paramount+ is the odd man out of the two major streaming bundles so far: Comcast's Streamsaver bundle, combining Peacock, Netflix, and Apple TV+, and the Disney-Max bundle.

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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.