When Fox, Warner Bros. Discovery and Wall Disney (ESPN) pooled their combined 14 sports-dominant channels and created streaming app Venu–since waylaid by a lawsuit and preliminary injunction–many wondered if NBC and CBS would join Venu or bundle their apps. The first, joining Venu, is a strong no. But the second could still be an option, or something even more progressive, like an app integration or licensing content.
During CBS parent Paramount’s quarterly earnings call this morning, Wall Street analyst Steve Cahall of Wells Fargo asked, “We’ve seen a lot of bundles in the industry. I don’t think we’ve actually seen any app integration or streaming integration deals. So I’m wondering what you think about that? You know, one of your peers also has a streaming product that has a lot of sports, has a good film library, and seems like very strong customer overlap.”
The latter reference seems to be an allusion to NBC’s Peacock (it could also be to WBD’s Max+, though Peacock, with the Olympics and NFL, has more sports).
Paramount co-CEO Chris McCarthy, after noting Paramount+’s digital branding and partnership arrangements with Walmart and Delta, responding to Cahall, said, “That being said, you can always count on us to be strategically looking through the lens of creating value. Now part of that, part of that exercise, is really to be opportunistic about both looking at things from a market to market perspective and from a broader partnership perspective. And in doing that, we ask ourselves is this the right market, or is there something better that we get and something more valuable.”
All that corporate speak means don’t rule out something even more than a bundle with an entity like Peacock. In a securities filing Monday, Paramount disclosed that in January, it had discussions with a company referred to as party B about a “potential acquisition of Paramount by Party B or an alternative strategic transaction between the parties including the potential for a Party B Streaming JV (joint venture). During the meeting, the CEO of Party B stated that Party B was not interested in a business combination transaction involving all of Paramount or a streaming joint venture but instead was interested in exploring a potential license for Paramount+ content for a licensing fee.”
Paramount had since agreed to a merger with Skydance, though that hardly rules out Paramount+ licensing its content to another app like Peacock.
The streaming developments come as Paramount is much farther ahead in subs and profitability than Peacock. Paramount reported this morning that streaming subscribers at Paramount+ rose 3.5 million to 72 million in the third quarter.
Paramount’s direct to consumer results, which includes Pluto TV, saw $49 million of profit in the third quarter compared to a loss of $238 million in the year ago period; with a full year of profitability projected for 2025.
Peacock by contrast added three million subs in its most recent quarter for a total of 36 million, precisely half of Paramount+’s. Peacock had negative cash flow of $436 million in the most recent quarter, compared to an even steeper shortfall of $565 million in the year ago quarter.
Paramount, whose properties include CBS, Nickelodeon and Comedy Central, is also engaged in a five week contractual standoff with Nielsen. Their contract is not renewed, but Paramount execs said the absence of the ratings measurement service has not impacted advertising relationships.
“We wouldn’t want the Nielsen fee for certain networks to be greater than the ad revenue those networks actually generate,” said Paramount co-CEO George Cheeks. “Now…we haven’t seen any adverse impact on ad revenue to date, and we don’t expect a material impact in Q4 butI do want to be clear…that we do recognize that Nielsen can be a valuable resource. It’s just that the economics have to make sense for the business.”
Paramount is engaged in a wave of cost cutting as it trims down before the deal with Skydance closes next year. But Cheeks said the Nielsen standoff is not about “affordability” but the value the measurement agency provides.
