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ViacomCBS CEO Bob Bakish On A Movie A Week On Paramount+ And How SpongeBob Drove Engagement

Jill Goldsmith and Dade Hayes
·4 min read

Paramount+ is the latest streamer to plant a flag on “one-movie-a-week” land as parent ViacomCBS boosts content spending in the wake of a big capital raise earlier this year.

“Frankly, there are not that many movies on Paramount+ today,” said CEO Bob Bakish in a call with analysts after the company released quarterly earnings. He said the one-a-week model – which echoes similar pushes by Netflix and Disney+ — will include a dozen short-window theatrical releases like Paramount’s A Quiet Place Part II. Other titles will come from the Paramount Players division or sub- studios like Nickelodeon, Awesomeness and MTV Entertainment. Awesomeness produced for Netflix a model of what ViacomCBS envisions feeding to Paramount+: the inexpensive, wildly popular rom-com franchise To All the Boys I Loved Before.

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He also announced that Paramount’s Antoine Fuqua-directed sci-fi thriller Infinite, starring Mark Wahlberg, will bypass theatrical release and hit the Paramount+ streaming service in June.

The idea is to consistently “have something on the platform that is fresh,” Bakish said.

The originals will join thousands of library titles – but “not deep library,” Bakish specified. As the company noted at a late February investor day, some 1,000 additional films will go live on the newly launched streamer in early June and more in July for a total of 2,500 titles in deals with Marvel, Epix and others, including The Avengers and Skyfall, as well as Paramount’s Mission Impossible 7 and Rocket Man.

The company is about to kick off a “Mountain of Movies” ad campaign to drive awareness.

Nickelodeon fare was key in driving Paramount+ at launch with originals The SpongeBob Movie: Sponge on the Run and spinoff series Kamp Koral: SpongeBob’s Under Years, Bakish said. He added that Nick accounts for “a double-digit share” of Par+ streams. He wouldn’t quantify that — but in response to a question said it’s less than half. “What’s most important is that this an example of our replicating in our streaming” a legacy position built up over decades in linear TV, he said.

ViacomCBS ended the March quarter with $5.5 billion in cash on hand, with $2.7 billion from the sale of equity and convertible preferred securities. CFO Naveen Chopra said the company can now invest more aggressively in streaming. Company-wide, content spending is about $15 billion. He anticipates 2021 streaming spend will more than double from 2020 but noted that the expense is incremental because some is allocated from linear and “doing double duty in both linear and streaming.”

Paramount+ launched March 4, a rebrand and expansion of CBS All Access. Parent ViacomCBS said this morning it had 36 global streaming subscribers as of the end of the first quarter, mostly on Paramount+ but also on Showtime’s OTT service and more targeted outlets like BET+.

“Our enthusiasm for the potential of streaming continues to grow,” Chopra said during the call. Streaming presents a “compelling market opportunity” for two reasons, he added. First, it expands the addressable base of users in linear TV, where subscriptions are declining. And second, average revenue per user (ARPU) has a “more compelling long-term trajectory” than linear. The dynamic is especially true outside the U.S., where many territories have lower pay-TV penetration but avid consumption on mobile or connected devices.

“We think that over time the per-subscriber economics of streaming can be accretive to linear, considering the combination of advertising and subscription revenue,” Chopra said.

That economic lens on the financials of ViacomCBS succeeded in shifting the conversation on the earnings call. Where analysts had grilled management for years about cord-cutting and declining ratings, ad revenue and pay-TV homes, this quarterly call was devoted almost entirely to the potential of Paramount+.

Bakish was asked about the new, ad-supported tier of Paramount+ launching in June. At $5 a month, it is a dollar cheaper than the basic tier of CBS All Access. He said the margins for Paramount+ will be superior to CBS All Access. “It also adds another important asset for us in terms of ad inventory,” he said. “We see the product generating higher ARPUs over time than the $9.99” tier, which has no ads.

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