Paramount+ Is Here. Is It Too Late?

You might not think you need another subscription TV streaming service in your life, but Tom Ryan very much thinks he can convince you otherwise. A Silicon Valley veteran whose super successful Pluto TV launched seven years ago this month, Ryan is now leading the effort to transform the pioneering (yet decidedly unsexy) CBS All Access into a supersize streamer called Paramount+. The remodeled platform debuts today, at a time when consumers are already wary from months of being pelted with pitches for HBO Max, Peacock, and all those other newbie plus-sign programmers (Disney, Apple, Discovery).

That intense competition is one reason skeptics worry the company is embarking on a real-life version of Mission: Impossible — and yet Ryan says he and his bosses at ViacomCBS are not scaling down their ambition. “Our aim is to be one of the biggest streaming services there is,” he says.

Establishing such a big target might come off as overly hubristic or even hopelessly naïve given the late date at which Paramount+ is rolling out its big streaming play. That ViacomCBS simply isn’t anywhere near as large a company as legacy-media peers such as WarnerMedia, Comcast, or Disney doesn’t help, either. But Ryan is convinced the average consumer, who in past years might have been fine with just a couple of streaming subscriptions, is now willing to include as many as five paid platforms in their monthly budget, leaving room for Paramount+ to squeeze into the top tier of essential streamers.

In order to do that, the existing CBS-centric All Access offering is being supplemented with thousands of hours of library programming from the ViacomCBS basic-cable brands (MTV, Nickelodeon, Comedy Central, VH1) as well as the now-obligatory promise of dozens of new original series. The movie library will also be dramatically expanded with thousands of titles from the Paramount and MGM vaults, while big feature-film releases from Paramount will now stream on Paramount+ as early as one month after their theatrical debuts. “Aggregating a ton of great content into one service, and having that service be one of the go-to, daily services that people use, is our goal,” Ryan says.

If this formula feels a bit familiar, well, that’s because it is: Paramount+, like Netflix or Peacock or Amazon Prime Video, is essentially looking to recreate the cable bundle that for decades funneled billions of dollars in revenue to conglomerates — and is now crumbling as millions of Americans flee into the arms of relatively cheaper streaming services. Consumers are cutting the cord because they don’t like huge cable bills and dealing with spotty customer service, and yet many do want the kind of soups-to-nuts programming mix you get with a cable subscription. And that’s why Ryan thinks Paramount+ can work: The breadth and depth of the ViacomCBS production factory, along with the company’s deep library, gives it the content necessary to create a must-stream TV app. “If you look at the history of TV, all of the winners — all of the real winners — have been big, broad aggregators of content,” he argues. “Broadcast TV, cable TV, YouTube, Netflix — [they offer] something for everyone. So I think if you want to be a major player in streaming TV/video, you need to be a broad-based product that can service a whole household and provide a range of great content in all, or almost all, key categories.”

While much of what Paramount+ is serving up mirrors templates established by other streamers, Ryan points to a few other advantages he thinks his new platform boasts:

➽ Thanks to its connection to CBS, there will be upward of 1,000 sporting events on Paramount+ each year, most notably NFL games. Comcast’s Peacock has also invested heavily in sports — particularly soccer and the Olympics — but NFL broadcasts could be a big weapon in luring cord-cutters who don’t want to bother with an antenna. (Amazon is going the same route by closing in on a deal for Thursday Night Football rights.)

➽ Consumers who pay for the $10 ad-free version of Paramount+ will get live feeds of their local CBS stations, including access to a slew of newscasts from across the country. CBS All Access has offered this since its inception — even at its entry-level price — but a national network feed remains something not offered by any other major subscription streamer.

➽ Paramount+ is aiming to offer the deepest, broadest offering of unscripted reality-TV-show content of any general entertainment streamer. “I think people don’t realize how big a category reality is in streaming, but that was invented at ViacomCBS through MTV, and it’s a category that we can be true leaders in,” Ryan predicts, pointing to dozens of unscripted shows from the MTV, VH1, and CBS vaults.

➽ And while it’s not Marvel or Star Wars, Paramount+ will continue what CBS All Access started with Star Trek, pouring millions into multiple offshoots of the iconic series that can only be streamed on the platform. (The animated kiddie Trek series Prodigy will now beam over to Paramount+ rather than debut on Nickelodeon.)

Importantly, Ryan’s bosses at ViacomCBS have argued they can make Paramount+ a key player in the new streaming universe without blowing up their existing non-digital businesses to the same extent as some rivals. So while select new releases from ViacomCBS’s Paramount Pictures will stream on Paramount+ four to six weeks after hitting theaters, the company is still putting almost all of its titles in theaters first — unlike WarnerMedia, which is streaming its entire 2021 slate of Warner Bros. films on HBO Max the same day titles hit theaters. Similarly, while Paramount+ will be the home for a new Beavis and Butt-head feature film, a weekly series featuring the characters will live on the Comedy Central cable network. And though there will be Yellowstone spinoffs on the streamer, the original series will stay on the Paramount Network while ViacomCBS will also keep cashing checks from Peacock, where reruns of the Western series continue to live.

Such moves have prompted head-scratching from some industry observers, who suggest the company is being short-sighted by not funneling everything over to its own platform, the way so many other big media companies are doing. But this more measured approach has been born of necessity: ViacomCBS simply can’t afford to completely give up all of the billions it takes in from licensing its content to third parties. It doesn’t have theme parks (Disney, Comcast), doesn’t own a distribution platform (Comcast, WarnerMedia), and of course isn’t a tech giant (Amazon, Apple).

Of course, this lack of scale is why many on Wall Street have for years predicted ViacomCBS is simply waiting to sell itself off to a bigger company, the way Rupert Murdoch sold off most of his entertainment assets to Disney. That could still happen, but the past year has seen ViacomCBS push back aggressively on the notion that it isn’t serious about streaming. At least week’s investor-day presentation, the company said it plans to spend $5 billion between now and 2024 building up Paramount+, far more than what it was putting into CBS All Access. And while Ryan says “financial considerations” have prompted ViacomCBS to sell off rerun rights to some key properties, the company’s thinking there is evolving, too. “Some of the decisions to license content were made prior to Viacom and CBS merging, then even after merging, prior to re-scoping the ambitions from CBS All Access to Paramount+,” he says. “We are going to be more selective about how we license. We’ll stay in the licensing game … but Paramount+ is a much broader service than CBS All Access was. The opportunities, and the need for bringing a lot more of that content to our own platform rather than licensing it off, is going to increase.”

Indeed, even as many ViacomCBS library titles will continue to live on other services, Viacom is going all out to make sure Paramount+ is stocked with spin-offs and reboots of properties it owns. A continuation of Frasier is headed to the streamer, rather than ending up on CBS or even NBC, where the show originally lived. Netflix will keep paying Nickelodeon millions for Avatar reruns, but the show’s creators are now signed on to build new worlds based on the show for Paramount+. And while Paramount+ won’t have exclusive rights to old episodes of all those MTV and VH1 reality shows Ryan talks up, it will be the only place with a new Real World series reuniting the OG New York cast, or fresh seasons of Road Rules and The Challenge.

Ryan argues ViacomCBS benefits from not being totally insular — and not just because of the big chunk of cash selling off content brings in. Licensing also lets the company take advantage of the bigger size of other platforms to bring new eyeballs to older shows that have been in reruns for ten or 20 years. Ryan points to a classic Nickelodeon show as an example. “My kids have become massive iCarly fans, and that’s because it’s on the homepage of Netflix,” he says. “We licensed that to them, and they’ve been a great promotional vehicle for that show. It’s one of the top shows right now on Netflix, based on how they publish their rankings. And we’re now bringing the iCarly reboot to Paramount+. So I think there are opportunities for us to continue to work with partners to introduce generations to shows from our catalogue [while] we can then build upon those franchises and bring new, original branded IP to Paramount+.”

Beyond the slew of old and new programming on Paramount+, ViacomCBS is counting on the growing audience for its free streamer Pluto to help build up its paid subscriber base. The platform, which ViacomCBS snatched up from Ryan and his partners in early 2019, now boasts over 40 million active users each month (75 percent of whom are in the U.S.). At least week’s investor presentation, much was made of plans to use Pluto as a promotional tool to push Paramount+. At some point soon, it is likely someone scrolling the just-launched Paramount+ Picks channel on Pluto will be able to click a button or two within the app and subscribe to Paramount+. (The company has already done something similar to sell Showtime to Pluto viewers.) Similarly, users of Paramount+ will eventually be able to watch virtual live channels similar to those found on Pluto, while easily clicking over to feeds of Showtime or BET+ (if they upgrade). “We’re going to want you to be able to enjoy them within one experience,” Ryan says.

Not everyone is convinced the more conservative ViacomCBS game plan will work. Wall Street types who believe linear TV is dead and companies need to go all-in on streaming, all at once, have dinged the company for not being fully committed to what they see as the future. Or they believe that ViacomCBS just doesn’t have the firepower to compete with bigger conglomerates. “The Paramount+ consumer proposition is weak,” Todd Juenger of Bernstein Research wrote in a note to clients last week following the ViacomCBS presentation to investors. While several analysts were impressed by what they saw from the company,  Juenger argued Paramount+ simply doesn’t have the right mix to win, saying its sports lineup “is too narrow to satisfy sports fans” and its entertainment programming “is non-differentiated, late, and lacks the global scale of competitive offerings.”

Juenger’s critique is logical if you view the current streaming competition as a zero-sum game (or, if you must, a “war”). It may well be that five years from now, the Big Four networks are replaced by the Big Four streamers, with everyone else either absorbed via mergers or run out of business. In that scenario, it is hard to imagine Paramount+ beating out Netflix, Prime Video, HBO Max, or the Disney combination of Disney+ and Hulu. But much the way basic cable networks existed alongside both bigger broadcast channels and smaller premium services (like HBO) during TV’s linear age, it hardly seems out of the question that the relatively smaller ViacomCBS could find a way to make Paramount+ a success, particularly since the platform will be able to rely on both advertising and subscription revenue. Plus, since the company is still aggressively licensing its shows and movies to other players, it can count on a significant third source of revenue that has largely dried up for some rivals.

The other secret weapon Paramount+ has may be Ryan himself. Legacy-media companies, including ViacomCBS, for years approached streaming as something secondary to their core linear networks — a business to be managed rather than fully exploited. They have since gotten religion on where their future is, but you can tell how quickly they’ve been shifting gears based on the constant exec shakeups over the past year or so. Peacock, HBO Max, and even the successful-from-day-one Disney+ all experienced some turbulence last year, and Ryan himself was a relatively late addition to Paramount+ roster. ViacomCBS CEO Bob Bakish didn’t put him in charge of streaming at the company until October, months after it had announced plans to makeover CBS All Access.

But now that he is in place, Ryan brings a much-needed entrepreneurial energy to the ViacomCBS effort. Paramount+ has the bones of an existing streamer and is part of decades-old company, one with several different division chiefs who have sometimes competing business needs. Execs from CBS, MTV Entertainment, Showtime, Nickelodeon, BET, and the old CBS All Access all gave presentations at last week’s investor conference, and while on one level it was impressive to see the company’s breadth, it was also hard not to imagine a coming clash of the titans among those division chiefs as they jockey for money and attention from Paramount+. Ryan isn’t the boss of any of those execs, but he is charged with figuring out how to use their resources to turn Paramount+ into a success. “There’s been a lot to work through,” Ryan admits. “It’s a big company, and I’m more of a start-up guy, and so I’m definitely learning how to navigate that because that’s not my natural habitat.”

It helps that Ryan has been running Pluto under the ViacomCBS umbrella for a bit more than two years now, during which time he has gotten to know folks at MTV, CBS, and other units as he has worked with them to put their content on Pluto. Bakish’s declaration that the success of Paramount+ is critical to the company’s future has also gone a long way to easing any internal battles over where resources should be deployed. “The alignment and the support for what we’re doing is tremendous,” Ryan says. “The ambition that we have here I think is really, really significant ambition.” And yet the exec is also under no illusion that it will be easy scaling up Paramount+ to where it needs to be in order to succeed. “We’re a company that has a good running start, but we have a lot to do to become one of the major players in paid streaming,” he says. “That’s what energizes me every day.”