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Paramount Earnings: Are 'Yellowstone' And 'Star Trek' Enough?

Paramount Global has seemingly done everything Wall Street demanded of Hollywood in recent years.

It selectively and strategically licensed key titles on the open market while reclaiming others for its own uses, built both a growing FAST service to augment its ad revenue and a mid-sized but growing SVOD service, released a steady stream of theatrical box office hits throughout the pandemic, and churned out the most-watched broadcast network and the most-watched hit on linear TV. All the while, it's used its linear assets to prop up its direct-to-consumer ambitions.

In Q3 2023, Parrot Analytics found the following top-line datapoints for Paramount Global:

  • Paramount Global Corporate Demand Share: 11.9% (third place)
  • Paramount+ US Total Catalog Demand Share: 10.2% (fifth place)
  • Paramount+ US Originals Demand Share: 5.8% (sixth place)
  • Paramount+ Global Originals Demand Share: 4.9% (sixth place)

Paramount+’s bets on Star Trek and Taylor Sheridan series continued to pay off, as those two franchises accounted for seven of the top 10 series available on Paramount+ in Q3 2023 with US audiences. Sheridan’s latest, Special Ops: Lioness, debuted in July and was among the top 2.9% of series across all platforms in Q3 2023. Paramount+’s originals demand share did tick down from 6.0% to 5.8%, but this is still much higher compared to Q3 2022 (5.1%) and Q3 2021 (3.9%).

In an effort to beef up its content offering amidst the dual labor stoppages, CBS began airing the first season of Yellowstone in September. This Paramount Network original streams on NBCUniversal’s Peacock, a result of the aforementioned pre-2019 licensing decisions.

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Demand for Yellowstone increased 12% during the five weeks CBS ran season one episodes. In fact, demand for the series while it aired reruns on CBS was roughly the same as when it aired new episodes of season four of Paramount Network in late 2021. This suggests Yellowstone was able to find a new audiences on CBS and get repeat viewers to watch the show on a Paramount-owned entity — in other words, audiences that Paramount Global could monetize.

And yet, Paramount Global’s stock price continues to fall since the re-merger and in a clouded and crowded ecosystem, the path forward remains uncertain.

Catalog Demand Share by Original Release Type

  • Streaming original content only accounts for a fraction of the overall TV demand for most major streamers, showing why many legacy companies are now re-opening up their libraries to licensing deals after trying to build up walled gardens earlier this decade.
  • Paramount+ is the second-most reliant on US linear TV (broadcast and cable combined) among all the major streamers, and the second most reliant on cable specifically.
  • This data suggests Paramount Global has successfully leveraged CBS, America’s most-watched broadcast network, and its legacy cable assets such as Nickelodeon, Comedy Central, MTV and more into a compelling SVOD product.
  • However, a downside of this is that linear TV is the most directly impacted by the Hollywood strikes, and Paramount+ may be more vulnerable than most of its competitors to a lack of new content heading into early 2024 and beyond.

Streamers With Highest Demand For New Content

  • Another look at the data suggests Paramount+ may be in good shape as the lack of new scripted content drags on.
  • Paramount+ is in the middle of the pack when it comes to demand for shows that have released new episodes in the last 12 months — 36.4%. Contrast this with Apple TV+, up at 73.0%.
  • This means that nearly two-thirds of the demand for series available on Paramount+ was for content with no new episodes in the last 12 months, suggesting consumers are either rewatching old series or discovering older content for the first time. These are the types of retention titles that streamers strive for in order to achieve long term success and viability.

On-Platform Demand Share

  • While demand for original series drives subscription growth, library content is key for customer retention, an increasingly crucial element of all streaming strategies as the market matures and consumers are offered more choice and easier ways to cancel than ever.
  • Library content will also be a crucial short-term asset as Hollywood’s labor strikes prolong, with new shows and movies likely to run dry in into early 2024 and beyond.
  • Paramount+ ticked down in total on-platform share, sitting at 10.2% in Q3 2023 compared to 11.2% in the previous quarter. Paramount+ did stay ahead of Disney+ in this ranking, but fell further behind Amazon Prime Video for fourth.

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