Free and paid offerings will remain Paramount’s left and right hands as the company, recently renamed from ViacomCBS, proceeds into a streaming-first future, president and CEO Bob Bakish said Tuesday at the Morgan Stanley Technology, Media & Telecom Conference.
“Maybe it’s not reflected in our equity,” Bakish told Ben Swinburne, Morgan Stanley media analyst. “But there’s no question of the power of our combination.”
Bakish led off his sales pitch by touting Pluto TV, the free ad-supported service that Viacom bought for $340 million in 2019, when its monthly-active-users total stood at just 12 million.
“We are the market leader in FAST with Pluto; that continues to be a rocket ship,” he said, nodding to the 10 million monthly average users Pluto gained in Q4 2021 to top 64 million worldwide. “That is significant growth, and it shows the validity of free, ad supported in the current marketplace.”
Paramount+ also exceeds expectations, Bakish continued. The company reported an increase of 9.4 million streaming subscribers in Q4, almost all at the paid service that launched a year ago, to send its global paid-subscriber number above 56 million. The company reported $1.3 billion in streaming revenue for the quarter.
“When we launched Paramount+, the general narrative I heard was, you guys are too late, and you don’t really have the wherewithal to do something interesting here,” he said. “Our proposition is working.”
Part of that business proposition includes lining up partners to help with the promotion — such as T-Mobile, which inked a deal in November that gives T-Mo subscribers a free year of the ad-supported, $4.99/month tier of Paramount+.
“We were quite pleased with what we saw in the fourth quarter from T-Mo,” Bakish told Wedburne, adding that this will soon include integrated billing, relieving T-Mobile subscribers of the need to save a credit card with Paramount to opt into this account.
In Europe, Bakish pointed to “our hard-bundle strategy,” with Sky and Canal+ adding Paramount to certain tiers. “It provides us a light switch to a very large number of incremental subscribers at zero subscriber acquisition cost.”
Between multiple mentions of Paramount’s role in the movie business, Bakish said the company has settled on a “fast follow” 45-day window for theatrical releases.
“The reality is there’s not much of a theatrical business after 45 days, with very few exceptions,” he said. In Paramount’s view, day-and-date streaming releases have only worked for kid and family titles. “It was a home run for Paw Patrol, it was a home run for Clifford.”
The conversation returned multiple times to the ways that Pluto and Paramount+ can help and learn from each other. For example, Bakish said the appeal of linear TV on Pluto led Paramount+ to add live channels earlier this month.
Further, Pluto is doing some lead-generation work for Paramount+, with a channel carrying the first episode of such Paramount+ exclusive series as 1883 and Star Trek: Picard. “We are going to be doing more integration over time,” Bakish said.
Viewers who sign up for Paramount+ because of that or through the T-Mobile deal, however, should note Bakish’s clear telegraphing of future rate increases above today’s $4.99 for ad-supported viewing and $9.99 for ad-free watching.
“The price umbrella is obviously well above that,” he said, referencing Netflix’s recent rate hike. “We think there’s plenty of room to move price over time.”