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The Paramount+ Launch: Viacom's Streaming History and What They Need to Succeed

There's a couple of things to talk about when discussing the Paramount+ launch: Viacom's history of streaming services on the internet, and CBS All Access.

Some Backstory with Viacom and CBS's Streaming History

Let's start out by talking about Viacom, the company behind not only Paramount+, but some of the brands featured in the service like CBS, BET, Comedy Central, MTV, Nickelodeon, and Smithsonian Channel (don't worry, I didn't know that was a channel either). From the '90s to the mid 2010s, the Viacom channels were at their peak. The Viacom channels delivered niche programming largely aimed at young people, and they were incredibly lucrative and successful at programming for that demographic. Then, Netflix and others started their streaming services, and a shift in the consumer's mind changed in how they watched shows. Initially, Viacom licensed their shows for Netflix, Hulu, and others as another revenue stream, but they soon realized that people were getting so used to streaming that they would cut their cable packages and just get an internet connection and a subscription to a streaming service; a streaming service that wasn't controlled by Viacom. The issue wasn't that Viacom didn't know how or want to create a streaming service, it's just that they thought they couldn't for various reasons, especially before the CBS merger.

It's worth it to note that the Viacom channels had robust broadband websites back in the day with lots of multimedia. In 2005, Comedy Central, MTV, and Nickelodeon all announced free ad-supported streaming websites with tons of full episodes of shows. This was short-lived, possibly because they were ahead of their time, but also because of the contracts they have with the cable companies. Your local cable company pays Viacom to get access to their channels per subscriber, and part of the agreement is to premiere shows and air older content through the cable company's on-demand service, and typically they have restrictions with what Viacom can do with their content on the internet. DirecTV currently has around 18 million subscribers, and it is estimated Nickelodeon costs a cable service $.78 per subscriber, meaning for DirecTV to carry Nickelodeon, DirecTV has to pay Viacom $14,040,000 just for Nickelodeon, and that doesn't include the rest of the Viacom lineup. And because viewership these days is down at a massive decrease, Viacom and other companies opt to raise their carriage fee to make up for the loss in ad sales, which means companies like DirecTV have to raise their rates. Eventually, this bubble will pop hard, which is why Paramount+'s success is crucial to ViacomCBS.

The problems started in 2006. CBS's former head Les Moonves would clash often with the Viacom leadership, which caused CBS to split from Viacom and form CBS Corporation. CBS took with them their news, sports, and entertainment divisions, as well as Simon & Schuster, Showtime, jointly formed The CW with Warner Bros, and CBS Interactive which included an acquisition of CNET Networks. Viacom got the rest of their cable networks, Paramount Pictures, and over time acquired several websites and libraries of movie studios. The deal made sense for both companies, which managed to do extremely well for a long time, until the mid 2010s when streaming was ramping up in popularity. CBS was one of the first companies to recognize the importance of having a streaming platform and released CBS All Access in 2014, the streaming service for the CBS fans. The service was home to CBS's library of current and legacy shows, the small selection of movies CBS owned, and a live stream of your local CBS network. Plus, they did release a few originals, including Star Trek content, as it was a valuable CBS-owned asset. The service had slow growth over the years, especially when compared to the massive subscriber count Disney was able to achieve in a short time with Disney+. Mainly because CBS All Access was priced at a Netflix rate without the Netflix sized library. Still, for a service mainly focused on one channel, it did pretty well, and was an incredibly forward thinking move that made CBS the more future-proof company. Viacom on the other hand did not have a streaming strategy.

In 2006, the new Viacom was still a massive company even without CBS. The cable channels would regularly top the ratings charts, and Paramount Pictures released several box office hits, including the first run of the Marvel movies. As Netflix, Hulu, and the others started their streaming services, much of the Viacom library could be found across them. Netflix paid Viacom to license their content, and Viacom saw it as just another revenue stream. Until the mid 2010s when it was clear viewers were leaving live television for the on-demand commercial-free streaming services. 

This was around the time Viacom found themselves in many carriage disputes with cable companies. Viacom wanted more money per subscriber for their channels, but Viacom had very little leverage in the negotiations. At the end of the day, the content keeping people subscribed to cable were news, sports, and premium shows like Breaking Bad, The Walking Dead, and Game of Thrones, all things Viacom was not in the business of providing. Viacom's channels were declining rapidly, as viewership of a show like South Park went from nearly 2 million viewers for new episodes in 2016 to a little over 1 million viewers in 2017. Of course, one could speculate that South Park's popularity was declining, but it's important to note that in 2014, Hulu paid nearly $100 million for the exclusive streaming rights to South Park, which undoubtedly had an effect on Comedy Central's ratings.

Even worse, the carriage disputes meant that Viacom's channels were removed from many cable companies' entire lineups after 2016, losing millions of homes the channels could be found in, thus devaluing their ad sales further. Still, Viacom's CEO continued to call itself a cable-first company, trying to maintain the remaining cable companies that still kept their channels. Cable was still Viacom's main income, especially as Paramount lost distribution of the Marvel movies to Disney, and Paramount just wasn't releasing the large amount of hits they once had. As online streaming increased, Viacom also found itself off of popular online cable services for years like YouTube TV, Hulu with Live, and PlayStation Vue, meaning it was out of millions of digital homes. 

Without a solid streaming strategy, Viacom made deals with their most valuable content, like South Park, Chappelle's Show, and Yellowstone for hundreds of millions of dollars. They also acquired Pluto TV, a free ad-supported streaming service with on-demand content, and live linear channels curated by Pluto TV with news, movies, entertainment, and sports. Viacom filled the service with content from their library of at least a year in age, and used to service to promote new Viacom content, like an MTV VMA channel for the VMAs and a Tosh.0 channel to promote the new season of the show on Comedy Central. It seemed like this was Viacom's future: try to keep the cable business as strong as possible by maintaining existing popular shows and producing reboots of notable existing content, and licensing content to the highest bidding streaming service and airing the rest on Pluto TV. 

That is, until talks of a re-merger with CBS began to take place. For years, Viacom had a great interest in merging again with CBS, as CBS was the number one network, and had an existing streaming platform with millions of subscribers, as well as Showtime with their premium catalog, and Star Trek, a show with lasting appeal and a built-in fan base. Les Moonves, however, did not believe Viacom would be a good partner with Viacom's declining brands and thought a movie studio like MGM would be the better bet. After years of talks and discussions, Viacom and CBS eventually announced a merger, and the new ViacomCBS was formed in December 2019. The combined company meant now Viacom has more leverage in cable company carriage agreements. With the strength of CBS, Viacom found itself back on many of the cable companies that had dropped it and can now be found on YouTube TV and Hulu with Live.

Even better for ViacomCBS's future, Viacom now has a robust streaming strategy. With CBS and their massive library of current popular shows and legacy content, and with premium offerings like Star Trek and Showtime, the company now believed they were better set up to have a streaming service with far more broad appeal. Viacom began to slowly add more of their library of content not found on a rival streaming service to CBS All Access throughout 2020, including Paramount films like The Godfather, and Indiana Jones. The service also began to incorporate some of the ViacomCBS brands front and center with six buttons to access content in their libraries, like CBS, BET, Comedy Central, MTV, Nickelodeon, and the Smithsonian Channel. The issue was what to do with the CBS All Access name. Now that all these brands are on a streaming platform, the service is beyond just CBS. WarnerMedia's HBO Max name made sense as HBO is a premium destination users can identify. NBCUniversal's Peacock made sense as it ties in the NBC mascot users know, while giving it a unique brand. CBS can't exactly doing the same and call their service Eyeball. So, what name can you choose?

I posted about this a few months back and suggested Pluto Plus, or some variant, as Pluto TV had tens of millions of users. I believed this was the better bet because there is no one brand under ViacomCBS that can generalize the service. I was proven wrong when they announced the new name would use the Paramount brand, which makes the most sense. Paramount is a name most users know and is a premium brand, so it works. The struggle now is how to market this rebranded service, which I believe they made several mistakes.

My Thoughts on the Launch of Paramount+

There are a few opinions one could have on the launch of Paramount+. On one hand, there was no mention in the marketing of the new service that it was a relaunch of CBS All Access. Perhaps this is something that just CBS All Access users need to know so they are ready for the change, but it wouldn't have been a bad idea to promote this for users who want early access so they can just subscribe to CBS All Access.

Another issue I had as a CBS All Access subscriber was the massive marketing hype around the service. It was advertised as this great new streaming service with a "mountain of entertainment" from the ViacomCBS library. For example, there's a few new specials Comedy Central recently released from a few months ago, as well as the series finale season of Tosh.0 that weren't on CBS All Access. It was my assumption that with the Paramount+ launch, much more of the ViacomCBS recent library would be added to the service, which has not happened. New Daily Show episodes from the previous night were added, but that was largely it. There's still content from 2019 and 2020 across the Viacom brands not on the new service, yet there's plenty of new CBS content.

They have added new Paramount+ originals to the service, like The Real World Homecoming, the new SpongeBob movie and spinoff series, and a handful of other Paramount+ originals that were ready for the launch. Of course, there will be more added throughout this year, but part of the issue is the fact that a lot of the exciting content people are looking forward to aren't ready at this time. I think the issue is the fact that ViacomCBS is very late to the streaming party, so they thought it best to release what they could just to get the new name out there. Which is fine, I get it, especially in this difficult environment we're in, but it is something users will need to wait for.

Beyond original shows is a question I have related to the fact that 2019 and 2020 content not on Paramount+ is will new shows that air on the main ViacomCBS brands also appear on Paramount+? For example, Beavis and Butthead is getting a reboot for Comedy Central, but before it airs on Comedy Central, a movie will be made for Paramount+. So, does that mean it is likely that after an episode premieres on Comedy Central, it will then show up on Paramount+? I don't have an issue with content needing to premiere first on cable, like South Park's deal with HBO Max, but will it ever appear on Paramount+? So far, this isn't happening.

One app design Paramount+ still uses is the same six buttons on the top with the ViacomCBS brands from CBS All Access, but where is a Paramount+ originals button? Those brand buttons are the second from the top thing the user first sees, and much of the content inside the brand buttons isn't new. The brands are valuable for sure, but users looking for the new Paramount+ originals have to ignore the big logos of the brands and click shows in the menu bar, and then click originals. Other content like Bar Rescue and Ink Master are shows on Paramount Network that are on Paramount+ but are buried under categories in the shows tab because there isn't a Paramount brand button.

Beyond what I consider to be an issue with the categorization of the content, the fact is that Paramount+ is the same app as CBS All Access. Which means the same user interface carries over with no improvements or new features. Meaning that although you can set profiles (mainly used for parental controls), there is still no watchlist. There is still no rating system. The recommendation system is based on what you watch whether you liked it or not. Clicking into one of the six button brands takes you to a page which shows two categories: trending and A-Z. This isn't engaging and anyone who has to sort through a hundred titles in an A-Z listing will give up on trying to find anything. My other issue is the service is it is still very CBS centered. I'm not talking about the news or sports, but when going through the categories of shows, CBS shows are very much still up at the front and given more prioritization.

One nice featured added under CBS All Access was a news tab to the menu bar, which shows the live CBSN stream, and the user can watch video clips of the news. But where is the sports tab? Sports were a very publicized distinction for Paramount+, so why isn't there a similar tab like news there for sports? The sports tab would show the live stream of CBS Sports HQ and sports video clips and full games beneath it. Sports fans have to scroll down several sections on the home page until they find the sports category. That's not exactly how I would design a flagship feature of the app.

I do have one feature request I recognize is unlikely to happen, but I would like to see it. Paramount+ still offers your local CBS network to be live streamed, as well as CBSN, CBS Sports HQ, and ET Live, which are also on Pluto TV for free. CBS All Access and Showtime OTT are two rare streaming services which offer live feeds of their linear channels. Showtime offers a fair amount of live shows, similar to HBO, so it's incredibly valuable it offers the live feed when HBO doesn't. If CBS and Showtime can do this, why can't other streaming services offer this feature? More importantly, why can't Paramount+ offer live streams of the linear feeds for BET, Comedy Central, MTV, Nickelodeon and Smithsonian Channel? I'm not saying Viacom should stream all their channels in the service, but if all the brands in the six buttons on the top of the app had a live stream, that would be incredibly valuable for the service. I'm sure there are issues with the contracts with cable companies, but if so, how can CBS and Showtime get away with it?

Conclusion

As an existing CBS All Access subscriber, I found Paramount+'s launch to be a disappointment. I expected far more content to be added from the existing Viacom library, which has yet to happen. I would imagine that will take a while because there's still a ton of content on other streaming services, like many of the shows that were cancelled on Comedy Central will get renewed on HBO Max, and other content from the other brands can still be found on Netflix, Hulu, Prime Video, and Peacock. Plus, it's the same CBS All Access app with no watchlist, no rating system, and a categorization problem carried over.

Overall, I think Paramount+ is an attractive streaming service for fans of ViacomCBS content, but ViacomCBS will need to consider what is more important in the streaming war: licensing their valuable content for lucrative deals with rival platforms, or gambling that the same valuable content will bring subscribers to Paramount+. Some big titles associated with ViacomCBS brands won't be on Paramount+ for years, and that can present issues in gaining subscribers. If ViacomCBS doesn't see the subscriber numbers they were hoping for, will they still choose to license the valuable shows? We will have to wait and see.

Overall, Paramount+ is a decent streamer. If you like shows and movies from the ViacomCBS library, CBS News, or Sports, there's plenty there. Until some big names like Yellowstone and South Park appear on the service, as well as the rest of the content licensed out to rival services, it will definitely need to be combined with other streaming apps.

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