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ViacomCBS Licensing Strategy Continues To Sell Streaming Ambitions Short [Parrot Analytics]

As ViacomCBS reports its latest earnings, Parrot Analytics has found that the company possesses a fundamentally sound collection of content and IP to be a major player in the streaming era, a primary goal for President and CEO Bob Bakish.

The problem is that ViacomCBS’s current status as an ‘arms dealer’ for its most in-demand content means that short term revenue is valued higher than building Paramount+ up as a sizable and notable competitor; if ViacomCBS wants to become a true power player in the space, streaming its most in-demand series exclusively and in full on Paramount+ is key to finding a way to stand out amongst the competition.

When it comes to Corporate Demand Share - a consolidation of original demand where platforms are combined based on their corporate parent to show where audience attention is ultimately going - ViacomCBS is in second place with American audiences, behind only Disney and ahead of fellow legacy media conglomerates WarnerMedia and NBCUniversal.

However, Paramount+ lags against its SVOD competitors - coming in fifth place in overall catalog demand share, and seventh place in demand share for digital originals in the US. Paramount+ is succeeding in driving high demand for its slate of original programming on average, but the volume of programming is not enough to make them a bigger player in the streaming space.

What explains the gap between ViacomCBS’s strong position in corporate demand and Paramount+’s middling performance against other streamers? ViacomCBS has decided to go for guaranteed revenue now by licensing out its most in-demand series - such as Criminal Minds, NCIS, Shameless, and Spongebob Squarepants - to other streaming platforms.

Using Netflix and other streaming platforms to strengthen potential discovery within a much larger subscriber base only works if those customers then seek out new seasons or spinoffs off-platform — like on Paramount+. The iCarly reboot premiered on Paramount+, and executives believed that having the first few seasons on Netflix would revitalize interest in the reboot, leading to an influx of Paramount+ subscribers. It’s unclear if this happened, in part because it’s also unclear if this is how subscriber behavior works.

Demand for original and exclusively licensed content is a key leading indicator of subscriber growth for SVOD platforms. In order to compete in the streaming game long term, ViacomCBS must prioritize clawing back the programming it is licensing out and placing it exclusively on Paramount+ or Showtime, or a combination thereof.

Corporate Demand Shares - United States

(Click here for more details on how we calculate Corporate Demand Share)

  • Corporate Demand Share is really a look at how the top media companies can do long term if they are willing and able to consolidate their original content’s availability onto their own platforms.
  • ViacomCBS accounted for 13.1% share in Q3 2021, up from 12.3% in Q2 2021.
  • While it trails Disney (20.1%) by a wide margin, it’s still ahead of fellow legacy media brands WarnerMedia (12.1%) and NBCUniversal (10.6%).

On Platform Demand Share - United States, Q3 2021

  • When considering demand for an SVOD’s full catalog - including digital originals and licensed content - Paramount+ held 8% share in the category for Q3.
  • This was a very slight improvement from Q2, when it had 7.9%. More importantly, Paramount+ leapfrogged its most direct competitor - NBCUniversal’s Peacock - to move into fifth place.
  • Nevertheless, the streamer still has a long way to go before catching leaders like Netflix (21.3%) and Hulu (19.1%)

Digital Original Demand Share - United States, Q3 2021

  • Paramount+ lags in the competition for digital original demand share. This matters because demand for original content is key to driving subscriber growth for SVOD platforms.
  • Its 3.9% share was an improvement from Q2 (3.4%), but not nearly enough to catch up with the bigger major streamers.
  • Paramount+ (formerly CBS All Access) has existed far longer than Disney+, Apple TV+, or HBO Max, and yet it has been surpassed in original demand share by all of these streamers over the past two years.

Average Platform Original Demand - Major US Streamers

  • Paramount+ does have success in generating high demand for the small number of originals it does produce.
  • The average demand is substantially boosted by multiple hugely popular Star Trek series that are Paramount+ originals, showing the value of a globally beloved franchise like this.
  • The number of original series Paramount+ has is significantly smaller than most of the platforms in this analysis. It has less than half the number of original titles of even Apple TV+, a much newer platform, and roughly the same amount as Peacock, its closest competitor in the streaming space. Paramount+ is clearly focused on quality over quantity.

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