Paramount Is So Confident in Showtime’s Franchised-Focused Strategy, It Turned Down $3 Billion Offer to Sell

Paramount Is So Confident in Showtime’s Franchised-Focused Strategy, It Turned Down $3 Billion Offer to Sell

Paramount Global continues to bet on SHOWTIME as it expands its strategy for streaming profitability. The company is so sure of SHOWTIME’s success that it has turned down an offer from former Paramount executive David Nevins who offered to buy Showtime for more than $3 billion in recent weeks, according to the Wall Street Journal. This was just the latest in a number of offers Paramount has received over the past few years for Showtime.

Paramount CEO Bob Bakish addressed the numerous offers to buy SHOWTIME during the company’s fourth-quarter earnings call last week when the company announced that its flagship streaming service Paramount+ had grown to nearly 56 million subscribers. At the time, the company also confirmed that it would raise its price when SHOWTIME became fully integrated into the Paramount+ platform.

“There is enormous value to unlock with the integration of Showtime and Paramount+,” Bakish said. “If we were to divest the asset, it would have to create more value than our own operating plan … But frankly, that bar is pretty high.”

Paramount has opted to keep the premium channel and streaming service as it looks to save money and increase revenue this year by integrating Showtime into Paramount+ and rebranding it as “Paramount+ with SHOWTIME.” Along with profitability, the goal of this freshly unified offering is to showcase the breadth and depth of the company’s libraries by bringing all of its most well-liked television shows and films under one roof. The company believes the plan will save money and generate more revenue than selling Showtime would.

“From a financial perspective, it helps us both top line and bottom line,” Paramount CFO Naveen Chopra at a Deutsche Bank investor conference Tuesday. “On the top line, improvements in engagement, customer retention, etc., helped drive revenue growth, but it also helps support what we want to do from a pricing perspective.”

The ad-free premium tier of Paramount+, which will include Showtime programming, will go up in price from $9.99 to $11.99. However, the ad-supported tier will only increase its price from $4.99 to $5.99, as this pricing option will not see an increase in new or library content. SHOWTIME became an add-on bundle inside the Paramount+ app last fall, and after an introductory discounted price, cost $14.99 per month for the pair of services. That price has been dropped to $11.99 ahead of the services merger, but it has provided Paramount with first-hand data of what it can expect.

“The fact that we have Showtime content integrated [in Paramount+], and we know that customers are willing to
pay for that is encouraging,” Chopra said. “In fact, since we’ve had the Showtime bundle in the market, even though it’s at a higher price than the base Paramount+ service, we’re seeing an increasing percentage of our new customers take that bundle. So it’s a pretty sizable chunk of new customer adds today.”

Also part of Paramount’s plan for profitability is to double down on its focus on franchises. Bakish and his team intend to make the pay-TV channel the home for franchises derived from the company’s extensive archives. Showtime is already planning new series to complement the tales told in the original versions of the “Billions” and “Dexter.” However, Paramount sees a much bigger future for Showtime, rebuilding the premium channel in the image and likeness of the Sheridan-verse.

In recent years, ubiquitous creator Taylor Sheridan has unquestionably been the most consistent television creator in the business. Beginning with “Yellowstone” there have been a pair of prequels (“1883” and “1923”) as well as non-Western themed series (such as “Mayor of Kingstown” and “Tulsa King”) and a number of other shows in various stages of development. These interconnected stories — either through plot or creative sensibilities — bring with them a familiarity that Paramount views as essential to keeping customers engaged. Chopra explained that from a marketing and churn perspective franchises “are inherently more efficient.”

“The higher levels of consumer awareness and built-in fan bases associated with [franchises] drive strong subscriber acquisition volume, lower acquisition costs, lower churn,” Bakish said on the earnings call. “Put simply, franchises give the people what they want. We see this with Paramount Films, with CBS series, with the Taylor Sheridan universe, with Nick’s kids’ product, and more. And while we will, of course, continue to take selective swings on new IP, there’s no question that franchises are a powerful advantage.”

Paramount executives pointed to internal data that a large percentage of engagement with Showtime content was driven by the network’s key franchises, despite the fact that they comprise less of the service’s budget.

“By extending and evolving these powerful Showtime franchises and supplementing them with the breadth of content on Paramount+,” Bakish said, “we’re able to deliver a powerful consumer proposition in both linear and streaming formats, thereby preserving revenue while meaningfully reducing total content expense.”

• Paramount Plus

  Paramount+ is a subscription video streaming service that includes on-demand access to 40,000+ TV show episodes from BET, CBS, Comedy Central, MTV, Nickelodeon, Nick Jr. and more. The lineup includes “1883,” “Tulsa King,” “Star Trek: Discovery,” Nickelodeon’s “SpongeBob SquarePants,” and MTV’s “Laguna Beach.” From well-loved franchises to compelling originals, Paramount+ offers a great library worth streaming. Live NFL games are included. The service also offers the option to watch your live CBS affiliate.

  Subscribers can choose between the Essentials Plan (which includes ads) for $4.99/month, or go commercial-free with the Premium Plan for $9.99/month. Subscribers can add Showtime to either plan for an additional fee.

  With their Premium Plan, in addition to not having ads, you will also get access to your local CBS affiliate to stream your local news, prime-time lineup, and late-night. You will also be able to download offline and watch select shows in 4K.

  With the lower cost “Essential” plan, you will still be able to watch live NFL games, Champions League, and national news – but you will no longer get your local CBS affiliate.

  With their new app, enjoy advanced recommendations, curated homepages, and new content categories while still being able to stream major live sports like NFL, College Football, College Basketball. Sports fans will also appreciate the service’s inclusion of NFL on CBS, PGA Tour, along with every match of UEFA Champions League and Serie A.

  The service was previously called CBS All Access.

  Prueba gratis 30 días

• SHOWTIME

  SHOWTIME offers a subscription video streaming service that gives access to content on Showtime without the need of a cable subscription. With your subscription, you’ll get access to all of their current originals like Yellowjackets, Billions, and American Gigolo. If you choose to bundle Showtime with Paramount+, you can get both services for $7.99/month (with ads) or $12.99/month (ad-free).

  With your subscription, you’ll also get access to their critically acclaimed catalog of previous shows like Shameless, Homeland, Ray Donovan, Dexter, Weeds, Nurse Jackie, House of Lies, Californication, Queer as Folk, and The L Word.

  SHOWTIME also has new-release films from CBS Films, Amblin Partners, and IFC Films, which appear on the streaming service 7-8 months after they are in theaters. Every month they also have hundreds of additional older movies from major movie studios.

  You can subscribe for US$ 10.99 a month either directly from SHOWTIME, or through Amazon Prime Video Channels, Apple TV Channels, or Roku Premium Subscriptions.

  Prueba gratis 30 días