Is Paramount+ “Focused” on Winning?

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Sometimes, I can only fight it so much. As much as I want to pivot and pick a unique story from every other analyst, sometimes I just can’t. The top story is what it is. Yes, every columnist wrote about Paramount+’s investor presentation this week. But it really was the story of the week.

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Most Important Story of the Week – Paramount+ Is a Focused Strategy, But Is It Focused Enough?

Part of me is sympathetic to ViacomCBS. Their executives read the news coverage as much as anyone else, and all they see is analysts calling them out for not going all in on streaming. Then, when they try to go all in on streaming, as they did this week, those same analysts call them out for being too late or not doing it right.

They just can’t win.

Of course, if you get that much criticism, some of it is likely warranted. ViacomCBS has been far from perfect, starting with that merged name. But they’ve been undervalued for so long they’re probably overvalued now. First, CBS is dismissed by observers because, frankly, they make shows for the part of the country that isn’t online. Second, I think their brands have more value than they’re given credit for. Third, between Showtime, CBS and Viacom, their library assets are strong. Fourth, Pluto really does seem to be killing it.

I can synthesize these two differing viewpoints down to this one word:


A good strategy, as strategy guru/UCLA Anderson professor Richard Rumelt describes it, is “focused strategy”. If you want to know the genius of Netflix over the last twelve years, it is that they were insanely focused on streaming.

Focus is also usually how disruptors beat incumbents. The incumbent has legacy businesses to protect. Sometimes–like with cable channels–those legacy businesses make lots and lots of money. Getting rid of that cash flow usually isn’t wise. So the legacy business will half-heartedly start a second business unit to mimic the disruptor. That means a company will have two different businesses competing with each other. By definition, that strategy isn’t focused. The genius of Disney under Iger was how swiftly he executed the pivot to streaming once he decided to do it. That was a focused strategy.

ViacomCBS has not been focused, even since the merger. While they announced a renewed focus on streaming, by planning to put all their Viacom assets onto CBS All Access, they turned around and sold many of their current top series to other streamers. Like Yellowstone or SpongeBob Squarepants. And Showtime is still lingering out there as its own streamer. Add to that Shari Redstone’s comments that they aren’t focused only on streaming, and it’s not crazy to conclude that, yeah, they still don’t have a focused strategy.

But–and this is key–isn’t Paramount Plus their most focused strategy decision to date? They’ll be putting nearly all their best content into that streamer. Sure, they’ll still have two or three different streamers–Paramount Plus for subscription, maybe Showtime still, and Pluto TV for AVOD viewing–but the whole company is mostly behind them. In other words, they’re more focused than they ever have been. True, they aren’t winding down their cable and broadcast channels, hence Redstone’s comments about being a content company, but those businesses make billions each year. It’s one thing to be disrupted; it’s another to destroy legitimate cash flows too soon.

So that’s the “focus” part, but is this a “strategy”? Simply getting into streaming isn’t enough. Streaming is just a technology. Strategy is having a business plan to win.

Streamers need focus, but more importantly, they need to focus on a strategy. The successful streamers have had focused strategies leveraging their strengths. Disney is a house of uber popular brands, and Disney+ reflects that. Discovery Plus is the type of reality shows that, again, Hollywood chattering classes don’t watch. (Or do, but won’t say so on Twitter.) Peacock’s focus is on every part of TV that isn’t scripted. Those are all strategies I like.

My gut is that Viacom CBS is realizing that their streamer needs to be the scripted version of Discovery Plus. The home for the type of shows that made CBS the most watched network in the 2000s. Whether they have enough content or whether they can avoid the shiny objects of prestige TV, we’ll find out, but at least they could have a strategy. And if that doesn’t work, just having the NFL could be enough. (Seriously, if ESPN+, Peacock and Paramount Plus end up as the future homes of the NFL, that’s a lot of guaranteed subscribers in the U.S.)

Overall, ViacomCBS is far from Disney or NBCUniversal when it comes to showmanship in an investor day presentation. But that doesn’t matter for customers. (And an investor presentation is notably not for customers.) What matters is whether a company has a unique value proposition they can market to customers. I’d argue ViacomCBS is more focused on their strategy than they ever have been with the Paramount+ rebrand. I still wouldn’t put it in the same tier as the other streamers I just mentioned, but it’s better than it has been.

(Last point: the dunking on the choice of a name just needs to stop. Paramount is a much bigger brand outside the U.S. than any option ViacomCBS had. Clearly, they have global aspirations–which most of the dunking analysts also claim to want–and want a brand name that can deliver that. Meanwhile, the Paramount logo is still recognized in the U.S. Lastly, it doesn’t matter. 20 years ago, Netflix and Amazon weren’t brands. Now they are. Brands and name changes can come and go easily.)

Data of the Week – Discovery+ Gets To 11 Million Subscribers Worldwide

I’ve avoided setting projections for each streamer’s launch because the error bars in those projections are huge. (Indeed, those who did project subscriber estimates for Disney+ – especially the Disney bears – were off by tens of millions. That should dissuade any of us from making estimates!) However, I doubt I would have predicted that Discovery+ would get to 11 million subscribers in less than two months. 

When I update my “estimates of U.S. subscribers” for the end of 2020 (coming soon!) Discovery Plus will be on the borderline between the tier 2 streamers (20-50 million subscribers) and the bottom tier. If they can double this number in their first year, they will be well on their way to establishing a foothold in the streaming wars. Notably, this is a worldwide figure, so parsing out the U.S. totals will still require some guess work.

Other Contenders for Most Important Story

DirecTV spin off

AT&T is spinning off DirecTV to raise money to both pay down debt and buy wireless spectrum. The new venture will be 30% owned by private equity firm TPG. AT&T has long been looking to offset the disastrous DirecTV acquisition, so this isn’t a huge surprise, and AT&T will still have a majority stake in the new venture. Long term, I don’t see this changing their priorities in streaming or cellular much.

The FCC’s Wireless Spectrum Auctions

I won’t pretend to be an expert on wireless spectrum, but the other big news from the week was that the FCC held an auction for additional “spectrum” that is needed for 5G. Verizon bought the most licenses in the new “c-band”, which is crucial for 5G. Overall, the spectrum set records for the FCC, indicating the high value of 5G for the cellular companies.

Disney+ Acquiring Licensed Series Globally

In the kids front–read my take on that from last week–Disney+ has acquired the streaming rights for two different series. Even Disney can’t produce everything they need for streaming. (Hat tip Emily Horgan.)

M&A – Vivendi Plans an IPO for Universal Music

With the fierce competition in music streaming from all the big tech companies and Spotify, music catalogues have seen their values rise considerably. As such, Vivendi is actually spinning out Universal Music Group into its own company. I’ll be curious how long it lasts as its own entity before getting purchased by some other player.

Lots of News with No News – NFL’s Next Round of Contracts

There have been lots of headlines about potential prices for the next round of NFL media rights deals. But very little facts. Let’s wait until this story finishes, then we can write about the implications. 

The Entertainment Strategy Guy

The Entertainment Strategy Guy

Former strategy and business development guy at a major streaming company. But I like writing more than sending email, so I launched this website to share what I know.


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