Paramount Global’s Robert Bakish

Robert Bakish, Paramount Global’s president and CEO, talks to World Screen about the company’s multiplatform approach, satisfying viewers and advertisers, selling content to third parties, the concept of scale in today’s market and more.

Multiplatform is a crucial component of Paramount Global’s business strategy. The company produces feature films and TV shows from its holdings located around the world. And it distributes that content across its numerous platforms and to third parties.

Paramount, formerly known as ViacomCBS, from the merger of the two companies at the end of 2019, is home to the storied 110-year-old Hollywood studio Paramount Pictures. This has been a banner year for the studio. It has had five films that debuted at number one at the box office, including Top Gun: Maverick, which has earned more than $1.4 billion globally.

Its numerous other assets include the broadcasters CBS in the U.S., Channel 5 in the U.K., Network 10 in Australia and Telefe in Argentina; the premium pay service Showtime; the channel group Viacom18 in India; and numerous cable brands, including Nickelodeon, Comedy Central and MTV.

As a player in the streaming business, Paramount offers different pricing options with the tiered subscription service Paramount+ and is a leader in the AVOD and FAST space with Pluto TV.

Paramount+ has fewer worldwide subscribers than competing global streamers. But as Bakish tells World Screen, the service performed well in the second quarter of this year.

Paramount+ boasts a broad range of movies and programming sourced from its parent company’s numerous divisions, from the TV series Halo and the Star Trek franchise to feature films, including classics like The Godfather—which also inspired the TV series The Offer—and recent box-office successes such as The Lost City, Sonic the Hedgehog 2 and Jackass Forever.

As Bakish explains, the company has a multiplatform approach to launching Paramount+ around the world and is leveraging international partnerships in doing so. For example, as part of a hard bundle through the long-standing relationship with Sky in Europe, Paramount+ has already debuted in the U.K. and Italy and will soon in Germany. Paramount+ is also available via channel stores and the SVOD options offered by platforms such as Amazon, Roku and Apple TV. And Paramount’s numerous channels help promote Paramount+.

As SVODs continue to garner attention in the press and on Wall Street, the less bandied-about success story has been AVOD. Bakish outlines the company’s belief that consumers like watching content for free, especially now as they feel inflation’s pinch. He talks about satisfying viewers and advertisers, selling content to third parties, the concept of scale in today’s market and whether Paramount is for sale.

WS: In contrast to some media companies that have placed all their bets on streaming services, Paramount maintains scaled theatrical, broadcast and cable businesses in addition to growing Paramount+ and Pluto TV. Why has this strategy been important?
BAKISH: For a while now, we’ve been focused on the fact that our multiplatform strategy is a clear advantage. When we started talking about that, it wasn’t exactly in vogue; it was all about streaming. But our belief, and the second quarter shows, is that the combination of our content, multiple platforms and the strategy we’re using to execute against them does provide an advantage. It gets us to the largest TAM—total addressable market. It helps us get an ROI on content investment.

Content moves sequentially across platforms, and it’s really important for creating consumer excitement and letting people engage. The second quarter shows that in spades. We are using these platforms to get that return on our investment to unlock multiple revenue streams. We took share in the box office, in broadcast TV and in streaming. And we took share commercially, including in the Upfront. We did business in the Upfront across our platforms, excluding theatrical, and it was our strongest Upfront yet. We showed the benefit of our scale and our ability to do business on a turnkey basis efficiently. We love our diversified portfolio. And in a macroeconomic environment with challenges, it also helps create stability, which is beneficial. It helps us leverage what we are at the core, which is our hugely popular content.

WS: How is Paramount positioned to maximize the value of its content across different distribution channels?
BAKISH: We are very strongly positioned. Look at our distribution channels. We have the number one broadcasting network in the U.S., CBS. We have the largest broadcast footprint globally—Australia, the U.K., Argentina and Colombia. We have the number one FAST ser­vice in the U.S. in Pluto TV. That’s growing very quickly as we globalize that. In the second quarter, we got 70 million MAUs (monthly active users). In the SVOD space, we had the fastest-growing brand in the U.S., not just among streaming brands but of all brands in 2021, in Paramount+. If you go back to when we did the ViacomCBS merger, we pointed out the value of the ViacomCBS international operating footprint. Fast-forward to today, we’re starting to leverage international in our streaming growth plan. We launched in the U.K., South Korea and Ireland. We launched in Italy in September and are launching in Germany, Austria, Switzerland and France later in the year. You’re starting to see that international operating footprint driving our business as a case study of what we can do. And part of the reason we’re doing it is we really assembled one company. Our aligned senior management team has conversations about where content goes and how we maximize promotion.

WS: Will your teams continue to license movies and TV programming to third parties?
BAKISH: One of the clear benefits of being a diversified media company is our ability to monetize content in various ways. And yes, that includes content licensing to third parties. We have a massive library of films and television—one of the largest libraries in the world. We feel licensing portions of that library, including early seasons of a series on a non-exclusive basis so we can use it for ourselves, is additive financially, and it’s also additive from a franchise-development standpoint. So yes, we’re in that business. We’re also selectively in the originals business for third parties; we’ve produced programming for people. As time has passed, we’ve pointed our core franchises internally. We’re focused on Paramount+ for those. But we still have some originals we do for people. It’s good incremental money, and it’s good for helping manage our talent ecosystem to provide some optionality. So yes, we’re in the licensing business, and we’re going to stay in that business.

WS: Paramount Pictures has had an impressive year. What factors have led to the string of box-office hits?
BAKISH: Once again, we believe in the benefit of a multiplatform distribution model. Two years ago, during Covid, and certainly last year, we said we believe in theatrical and will hold films for it. Some of our competitors said, No, we’re going streaming first. We’re going day and date. We said, No, we don’t believe in that model, we believe in theatrical. Fast-forward to 2022, the first five films the studio released all opened at number one in theaters: Scream, Jackass Forever, The Lost City, Sonic the Hedgehog 2 and Top Gun: Maverick. The first four of those are already on Paramount+ and went in what we call the 45-day fast-follow model, which is the preferred model. We were the first studio to say that, and now a bunch of others have [followed], including the guys that were in the streaming-first model. Why were the films successful? They’re good films, but we also used our platforms to make them popular. All these films leverage our internal assets, whether they’re CBS, MTV or Pluto TV, to drive consumer awareness, bring people to the theaters and build awareness. Top Gun: Maverick was in theaters longer than 45 days. It grossed [over] $1.4 billion worldwide. It’s one of the top ten domestic films of all time and is Paramount’s number one domestic movie of all time. We remain committed to theatrical. We will keep releasing movies in theaters, and then, in general, we will follow that up with a presence on Paramount+.

WS: Years ago, in the cable business, insiders would talk of a first-mover advantage. Today, have there been advantages to not being the first to launch an SVOD service?
BAKISH: You can benefit from being first. An example is the benefit we’ve had in blazing the Pluto TV trail. Before most people in the industry had started [talking about] FAST, we were already huge believers and acquired Pluto TV in 2019. We’ve been proven right, and others have followed us. But you also can benefit from being a follower. We’ve studied the SVOD category and what works. When we launched Paramount+, we said we wanted a broad content offering and a dual-revenue-stream model. We were an outlier with the notion of having a lower-cost ad-supported tier. The industry has now moved in that direction. We also saw the benefit of broad distribution, and that’s where we’ve chosen to play that a little bit differently. You see us pursuing this mix of hard bundles and channel stores and DTC. We were the first people to do hard bundles at scale. You’ll see people follow there. There’s a benefit to following and understanding what works in the marketplace and then deciding how you will be differentiated in your pursuit based on that.

WS: How do you balance growing Paramount+ subscribers and investing in content against creating value for shareholders?
BAKISH: It’s a balance. Because market perceptions and [valuations] tend to [change] over time, you have to decide what you believe in. Then you have to execute against that. We believe it’s important to drive stable earnings from our traditional businesses—broadcast TV, cable, etc.—while investing to create value in the biggest growth market in media, which continues to be streaming. Over time, we expect our DTC business to have TV-media-like margins. We’re not there yet, but we’ll get there. And part of the reason is the benefit of operating as a multiplatform business. It gives us advantages in content ROI and marketing, and those advantages ultimately accrue partially to the streaming P&L. So, we are building it as a growth asset, but a growth asset that will be a financially attractive business in a couple of years. We’re very happy about that. The market hasn’t responded the way we had hoped in terms of equity value yet, but we see a very clear path there, and we’re convinced we’re going to create substantial shareholder value.

WS: What led you to believe in AVOD before others did?
BAKISH: We believe that a huge number of consumers like a free product. We think this notion that the whole video business would go strictly SVOD was fundamentally wrong. There’s always been a free segment in media—broadcast television is free media. We thought that would be the case in streaming. We believed in FAST before it was called FAST. We looked out at the marketplace and acquired the best asset in the industry in Pluto TV. Then we added fuel to it because we said we believe in the category. We can add value in the category both through content, where we have massive libraries that we’ve deployed on Pluto TV through promotion, where we know how to connect consumers with messages, and through commerce, where we have one of the leading advertising businesses in the U.S. We serve agencies and their clients both on a direct basis and through programmatic with Pluto TV. Advertisers have found that it’s a great source of high-quality inventory. It may be library content on the entertainment side, but it’s high-quality content. If you look at some of the demographics, it skews younger; some of those audiences are pretty hard to reach in general. Pluto TV has turned out to be a great consumer product and a great product for advertisers. We still think it has a lot of runway ahead of it. We’re in international expansion mode now, including doing some interesting partnerships like the ones we did with Viaplay Group in the Nordics and Corus Entertainment in Canada.

WS: You were in charge of international businesses for a long time. How are they contributing to Paramount today?
BAKISH: In two ways. One, they’re a source of earnings and cash flow in the current marketplace. And two, they’re a platform to drive growth in streaming and capture market share therein. We use that broadcast portfolio—Telefe in Argentina, Channel 5 in the U.K., Network 10 in Australia—and our pay brands MTV, Nickelodeon, Comedy Central, etc., to do just that. It’s not just the platforms; sitting behind those are content studios. We’ve got a dozen content studios around the world, including being one of the leading producers of Spanish-language content in the world. We’re using [the studios] to fortify our local offerings in places like the U.K. and Latin America, as well as our global offerings, because we’re going to use that to provide product on Paramount+, including on a dubbed basis.

Among the benefits of operating on the ground internationally, you get market knowledge, you have platforms, you can promote [programming], and you have access to content, but you also have relationships. We’ve been in business with Sky in the U.K. for decades, and we saw an opportunity to work with them to accelerate our streaming journey. That’s where this hard bundle strategy came from. We did it in the U.K. and it’s performing above our expectations. [We did] it in Italy, another Sky market, in September, and then we’re going to do it in Germany, another Sky market, later in the year. We’re also going to France, the Canal+ market, but the same idea, later in the year. Those are all owned-and-operated services. We also have partners and know people in places like India and Eastern Europe. In India, we’re working with our existing joint venture, Viacom18, with Reliance, a big partner. We’re going to have them launch Paramount+ in a package with their service. Their service now has IPL cricket rights, which is the most important thing in Indian media. We’re thrilled with that, particularly since we don’t have to invest in that on the local side; we can just be packaged with it. That’s a very capital-efficient model. In Eastern Europe, we decided to do that in partnership with SkyShowtime as a joint venture. Long story short, the combination of our assets outside the U.S., including the people and knowledge we have on the ground and the relationships they’re in, are creating great advantages for us today. It’s really hard to replicate that advantage. We’ve been there for decades. It takes time.

WS: What have you learned about managing in times of change?
BAKISH: It’s important to understand what you’re up against, what assets you have to leverage, and what challenges you’re trying to manage. One of the great things about operating outside the U.S. is that I’m a big believer in this notion of idea-pilot-scale. We can go to a market outside the U.S. where we have an idea, do a pilot, try it, and see how it works. Maybe you have a good idea; maybe it doesn’t work; you never know. As you do it, you can learn and fine-tune it and adapt it. Then scale it and build from there.

One of the other things I found very important is that I can think whatever I want as the CEO, but I’m not going to get it done. The teams all around the world get it done. So communication, explaining to people where we are, where we want to go, and how they fit in, is super important because they’re the people who are executing. We should never lose sight of that. All through Covid, we have done these Bob Live town halls every month. We tell people what’s going on, and we don’t focus only on the positive; we give a holistic story and ensure that they’re equipped as well as they can be to do their jobs and help us win. That’s what we want to keep doing.

WS: There is talk that Paramount may be for sale. What can you tell us? On the other hand, are you interested in acquisitions?
BAKISH: I’d say two things. First, when people say we’re subscale, I ask, how do you explain that? Tell me, who else has the number one broadcaster in the U.S. and the largest portfolio of broadcast assets? Who else has one of the world’s leading cable groups, with globally recognized brands and IP in it? Who else has a 110-year-old film studio with a massive library? Tell me, who else has the number one FAST service in the U.S. and one of the top SVOD services in terms of growth trajectory? Because when I look at it, the answer is nobody. Nobody else has that combination, including the international operating footprint. So as far as I’m concerned, we have real scale, and we’re increasingly deploying it, and people are seeing the momentum. We don’t have to do a deal. We’ll keep taking share just like we did in the second quarter. The merger of Viacom and CBS, now Paramount Global, was a game changer for everyone involved.

Second, frankly, it’s corporate America; it’s public corporations. Everything’s for sale at a price. And our job is to be stewards of shareholder value. If there’s something interesting to do, whether that’s acquiring a company or selling our company, of course, we’ll look at it. But that’s something you can’t control. What we can control is executing against a path, leveraging a unique and highly valuable portfolio of assets that we own, with the result that people are increasingly seeing as momentum. We’ll see. M&A has a rich history in corporate America in media. I’m sure there will be deals in the future. Where and when? How? I have no idea. We’re focused on executing, but we’re doing so with an open mind.