Paramount Global is ramping up its international expansion, not only with its subscription service Paramount+ but also expanding Pluto TV’s reach. CFO Naveen said Paramount hopes to deliver over $9 billion of direct-to-consumer (DTC) revenue by 2024 – fueled by balancing its legacy media business with the emerging streaming market.
Speaking at a MoffettNathanson investor conference Thursday, Chopra pointed out while streaming is causing global viewership to evolve, it also adds value to Paramount’s linear TV business.
The crux of Paramount’s strategy, he continued, is to invest in content that can be utilized across the company’s portfolio of businesses.
“It’s not just linear or just streaming,” Chopra said, meaning Paramount doesn’t have a streaming service that’s “entirely dependent” on producing original content.
“It also means that the traditional side of the business can benefit from reduced content investment, as audience behavior continues to evolve,” he said, noting how Paramount is employing a 45-day theatrical window for its movie titles, before releasing them to its streaming services.
Chopra went on to say the combination of free-to-watch and premium subscription gives Paramount access to a “very large total addressable market [TAM].” Paramount+ and Pluto TV have their own distinct viewership, and Paramount also offers a hybrid streaming model in the form of Paramount+ Essentials.
Pluto TV is particularly driving up TAM, he added, especially in international markets.
Paramount launched Pluto TV in the Nordics this week, partnering with local broadcaster Nordic Entertainment Group (NENT). Joining forces with NENT, which runs a local AVOD service known as Viafree, helps Paramount further penetrate those local markets.
Another notable international partnership is with Comcast’s Sky. Paramount and Sky entered a joint venture known as SkyShowtime. The companies plan to target their combined offering to about 20 different European markets, Chopra said. The JV allows Paramount to better capitalize on investment returns with global expansion.
“In some cases, the economic structure of how content is made available in those markets makes it challenging to invest too aggressively from a streaming perspective,” he said, or Paramount may not have access to the same local content capabilities. “And in that case, being able to partner with somebody who can help add scale to that is valuable.”
The AVOD space is heating up, with Disney and even Netflix planning to implement ad-supported tiers. But Chopra said that’s easier said than done, which Paramount learned from Pluto. Paramount’s strategy with Pluto is bolstered by the ability to sell inventory across a combination of programmatic and direct channels.
“Combining those things is complex both from an infrastructure perspective but very important from a monetization perspective,” he said, noting Pluto’s success with that has helped put the service on the map.
“The linear business probably has more stability than a lot of people understand,” he said. “Which isn’t to say it’s not changing over time, but there are still large numbers of consumers that utilize both linear television and streaming services.”
By beefing up its intellectual property and extending cross-platform reach, Chopra said Paramount has stitched together a one-stop-shop for advertisers.
“They can get access to millions of homes, and they can optimize their buys based on what is the combination of linear and streaming inventory,” he said. “From our perspective, it gives us the ability to package what is becoming increasingly scarce linear inventory with digital video inventory.”
Chopra added Paramount’s broad content library is beneficial in that Paramount fully owns and controls most of that IP, something that doesn’t apply to pure play streamers.
“That’s content that is really important from an engagement and retention perspective, that we can use at Paramount+ at a very low cost,” he said.