ViacomCBS Needs To Start Streaming Showtime Originals on Paramount+

I’ll come right out with it: ViacomCBS is too small, too far behind its competitors, has too many streaming nameplates, and is running out of time to sort itself out.

“There will be a small universe of truly global platforms that can spend $10-plus billion a year on content and do so profitably,” Kevin Mayer, the Candle Media co-CEO and former Disney streaming chief, said recently on Bloomberg Technology. “I think that is four or five services at the most.”

Netflix, Disney+, Prime Video and HBO Max have separated themselves from the pack with more than 100 million global subscribers each. Apple can keep dumping billions of dollars into Apple TV+. All of those streamers are backed by giant media or tech companies committed to spending tens of billions of dollars a year on streaming technology, marketing and content.

Can ViacomCBS compete with that? CEO Bob Bakish says it can.

“This is definitely a time of change, and streaming certainly matters more than ever,” Bakish said at a UBS conference in December. “And we’re aggressively leaning into it on a global basis and using our strength in content, in brands and distribution to accelerate that streaming business.”

ViacomCBS has prioritized Paramount+ as its global streaming platform — the Halo global premiere on March 22 will be a massive noisemaker — but still has too many other streamers (Showtime, BET+, Noggin, Pluto TV, etc.) competing with Paramount+ for finite technology, marketing and content resources.

Bob Bakish Has Repositioned ViacomCBS

Since the December 2019 merger of Viacom and CBS, CEO Bob Bakish has transformed the combined company:

• Shedding non-core assets like trade publisher Simon & Schuster ($2.2 billion), the Hollywood production lot ($1.85 billion), and the Manhattan headquarters ($760 million) to reduce debt and plow more money into streaming.
• Shutting down Smithsonian Channel Plus as a freestanding streamer and eliminating the Comedy Central Now and MTV Hits premium channels on Apple TV.
• Relaunching CBS All Access as Paramount+ with a catalog of more than 20,000 TV episodes and feature films.
• Launching Paramount+ originals like Taylor Sheridan’s 1883 and feature film Clifford the Big Red Dog and shifting RuPaul’s Drag Race: All Stars and Halo from Showtime to Paramount+.
• Entering into a joint venture with Comcast for the SkyShowtime streamer that will launch this year in 20-plus European markets and include content from both companies.
• Putting The CW, the broadcast network owned jointly with WarnerMedia, up for sale so the owners can shift their CW content budgets to Paramount+ and HBO Max.

ViacomCBS will host an event for Wall Street analysts and reporters on February 15 that the company touts in the invitation as a chance to “see how our diverse mix of global content is fueling the growth of Paramount+ around the world.” The event is on the same day that ViacomCBS reports its quarterly earnings and will likely include a forecast of Paramount+ subscriber growth over the next several years.

“We’ll also give you an update on our entire streaming ecosystem, and that includes Pluto TV as well as Showtime OTT,” Bakish said in December at the UBS conference, “and we’ll share with you how we’re using the assets of this great company to pursue a global streaming strategy.”

ViacomCBS declined to comment on the investor event, but I expect we’ll hear a lot about the potential for franchises like Star Trek, NCIS, South Park, A Quiet Place, Top Gun, SpongeBob SquarePants, Paw Patrol, etc., as IP for future iterations. Less likely but still possible: an announcement that Yellowstone will stream globally on Paramount+ and SkyShowtime and be shared in the U.S. by Paramount+ and Peacock.

Series announcements are already incoming. During this week’s Television Critics Association press tour, Paramount+ announced renewals for Mayor of Kingstown, The Game and SEAL Team, series adaptations based on Flashdance and Urban Cowboy, and an April 28 premiere date for scripted series The Offer about the making of The Godfather.

More Streaming Consolidation is Coming

Netflix, which has added 55 million global subscribers in the last two years, spooked investors in late January by forecasting that it would add only 2.5 million in the first quarter of 2022. (Analysts expected 8.5 million.) Netflix shares tumbled 22% and most other media companies dropped less sharply on fears that the ceiling for global streaming households is lower than investors thought.

Those lower growth expectations — and lower share prices — may put pressure on ViacomCBS, Comcast, Warner Bros. Discovery, Roku, Lionsgate and AMC Networks to merge into bigger global media companies with bigger global streamers. ViacomCBS has been mentioned as a potential acquisition for both Comcast and Warner Bros. Discovery.

Media analysts also expect to see consolidation among the streaming services themselves. Warner Bros. Discovery will likely combine HBO Max and Discovery+ into a single streamer. Disney could consolidate Disney+, ESPN+ and Hulu into a single service after it takes full ownership of Hulu from Comcast.

“Companies want to create a single service when they are targeting a common audience for their various content, particularly if their cable-network brands target a similar audience,” Brett Sappington, a VP for media research firm Interpret, told Decider. “They will also want a single service if they need to aggregate enough compelling content to compete effectively in the marketplace.”

Showtime Is the Odd Brand Out

ViacomCBS ($22 billion market value) is too small to compete with Apple ($2.7 trillion), Amazon ($1.5 trillion), Disney ($252 billion), Comcast ($227 billion), Netflix ($170 billion), or Warner Bros. Discovery (projected $60 billion) in global streaming. Until it finds a merger partner, ViacomCBS’s best bet is Paramount+.

“Viacom has BET+, they have Showtime, they have Paramount+, and they have their free service, Pluto TV,” Ross Benes, an eMarketer senior analyst, said recently on eMarketer’s Behind the Numbers podcast. “That’s a lot of services. People aren’t ever going to subscribe to 12 apps no matter how many streaming services launch, so you’re going to see greater competition for consumers’ entertainment budgets.”

Showtime, which has about 27 million U.S. subscribers, has been in the TV zeitgeist the last few months on positive reviews and big viewing numbers for franchise revival Dexter: New Blood and upstart thriller Yellowjackets. Showtime is touting its hit originals as big reasons for its best quarter ever for new signups.

Two hits, though, is not enough.

“Showtime, which once credibly argued that it was a legit HBO competitor, has been underfunded by its parent company,” Puck co-founder Matt Belloni wrote in his influential newsletter, “often going months between high-profile premieres, and often losing A-list TV packages to the deep-pocketed streamers like Netflix, AppleTV+, Amazon and HBO Max.”

The title of Belloni’s story: “Why Does Showtime Still Exist?”

WarnerMedia’s differing evolutions of HBO and Cinemax offers two paths forward for Showtime: (1) keep stocking Showtime with originals and make them all available for free on Paramount+ as WarnerMedia has done with HBO and HBO Max, or (2) stop running new originals on Showtime and turn it into a premium cable channel for movies as Warner media has done with Cinemax.

The timing is good now to make a change. Many of Showtime’s bigger shows have come to an end (Ray Donovan, Shameless, Homeland), the network recently cancelled two others (Black Monday, Rust), and the remaining originals (Billions, Desus and Mero) would boost Paramount+. And Showtime already licenses some originals to other outlets; Shameless is currently on Netflix.

The U.S. market is the only one where ViacomCBS offers Showtime and Paramount+ separately, and unifying them along with BET+, Noggin and Pluto TV as a free tier is ViacomCBS’s best route to survival until a merger partner emerges.

Scott Porch writes about the TV business for Decider. He is a contributing writer for The Daily Beast and produces the Must Watch streaming podcast. You can follow him on Twitter @ScottPorch.