Who’s Thriving and Who’s Struggling: Annual Streaming Scorecard Part Four

Last year, the streaming industry underwent a significant transformation, shifting away from the frantic growth of previous years towards a more restrained financial approach. These dynamics have led to endless consolidation talks and further shake-ups among the largest media companies.

Since the beginning of the year, FilmTake has explored the challenges and opportunities facing the leading streamers.

> Part One covered Apple TV+ and its expanding film slate.

> Part Two addressed Disney-owned services, Disney+ and Hulu, and the deterioration of its IP hit machine.

> Part Three focused on two outside behemoths, Netflix and Amazon, which supplanted Hollywood as the audiences’ go-to source for films and shows.

> Part Four will examine the two streaming laggards, Paramount+ and NBCUniversal’s Peacock, and recent speculation that these two legacy media giants could merge or bundle their streaming services.

Paramount’s Days Are Numbered as Merger Madness Grips Hollywood

Paramount Global and Comcast have engaged in discussions to explore collaborating, including potentially merging their respective streaming services – Paramount+ and Peacock. This potential partnership could resemble SkyShowtime, a streaming service featuring Peacock, Showtime, Paramount+, and Nickelodeon, currently available in 22 European markets.

A combined streaming app between Paramount+ and Peacock could yield substantial cost savings for both companies. It would also broaden customer choices, particularly in live sports offerings.

However, it’s becoming clear that Paramount Global and its disastrous leadership team want to cash out rather than rebuild through a partnership.

Apple and Paramount were in talks late last year to bundle their respective streaming services. With its relatively small content library but technologically solid foundation, Apple finds a strategic advantage in aligning with Paramount’s more extensive content offerings. This partnership could redefine the competitive landscape in the streaming market and continue to shift Apple towards an aggregator.

Warner Bros. Discovery (WBD) initially expressed interest in Paramount, followed by Allen Media. Subsequently, reports emerged of Comcast, the owner of Peacock, potentially considering a merger with Paramount. Adding to the flurry of developments, Paramount’s longstanding partner Skydance Media is reportedly contemplating acquiring the 110-year-old studio. Paramount purportedly declined an all-cash bid from private equity giant Apollo, opting instead for discussions with Skydance Media.

Last week, Paramount started clearing room on its wasteful board of directors to appeal to potential suitors. Whoever the buyer is, they will acquire the studio at a deep discount after its management has run it into the ground over the last decade, but not before siphoning off billions from shareholders.

The traditional media giants (Disney, Warner Bros. Discovery, Paramount, Universal) want to reconstruct cable television and return to making outsized profits instead of losing money hand over fist on siloed streaming services.

Uncover What Streamers Like Paramount+, Peacock, Amazon, and Netflix Pay to License Films and Shows Worldwide with Exclusive Distribution Intelligence from FilmTake.

Worldwide Film & Television Distribution Intelligence

Get unparalleled access to market intelligence reports that draw on financial data and insights from dozens of content distribution deals worldwide between key industry participants.

Film and Series distribution rates and terms deriving from dozens of agreements for rights to transmit films and episodic television via PayTV and SVOD.

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Licensing Terms & Included Programs:

Pay-1 & SVOD Rate Cards for Motion Pictures and Series Exhibited Worldwide in Multiple Availability Windows

  • Motion Pictures: Pay-1, First Run, Second Window Features, Recent Library Features (Tiers AAA,A,B,C), Library Features (Tiers AAA,A,B,C), Current and Premium Made-For-TV Films and Direct-To-Video Films, covering many license periods over the last decade
  • Episodic TV: Current, Premium, Premium Catalog (1HR & 1/2HR), Catalog Series (1HR & 1/2HR), and Catalog Miniseries + Case Studies on Current Mega Hit, Catalog Mega Hit, and Premium Catalog, covering many licensing terms from 2012-2024
  • Because most-favored-nation rates operate in practice, the rates and terms apply to a diverse range of content and distributors worldwide in multiple availability windows.

Peacock Fails to End “Peak Losses”

NBCUniversal claims it has finally surpassed its peak losses in streaming, albeit trailing behind industry leader Netflix. Despite boasting a 50 percent surge in Peacock subscribers to 31 million by the end of 2023, this growth is overshadowed by the fact that it stemmed from a relatively small user base.

While NBCUniversal celebrates a slow turn towards profitability, Peacock still stands as the streaming industry’s biggest financial sinkhole among entertainment giants. Despite their bold declaration that 2023 would mark the end of “peak losses,” the platform suffered a staggering $2.7 billion loss, up from the previous year’s $2.5 billion loss.

Although Peacock’s revenue improved in the latest fiscal year, the platform continues to hemorrhage funds. Despite this improvement, the fourth-quarter loss, while showing some progress, remained alarmingly high at $825 million, indicating a rocky road ahead. Comcast’s optimistic projections for 2024 fail to mask the platform’s financial woes despite attempts to highlight individual successes that serve as a fleeting bright spot in an otherwise grim landscape.

Peacock’s average revenue per user (ARPU) is in the bottom tier of streaming services, hovering around $10. Comparatively, Netflix expects its ARPU for its new AVOD service in the U.S. and Canada to generate $17.50 per month, compared to SVOD’s $16.75 ARPU.

Paramount Pleads with Disgruntled Investors for More Time to Turn Profitable

Paramount Global pleads with investors for patience and extended timeframes regarding streaming profitability, underscoring their ongoing struggles in the streaming space. Despite being the subject of considerable acquisition rumors, the company grapples with the harsh reality of prioritizing profit generation, including within its streaming division, where it claims that streaming investment peaked ahead of plan.

Nevertheless, streaming user numbers continued to rise throughout the previous year. Paramount+ closed out 2023 with 67.5 million subscribers, marking an increase of 11.6 million over the year. Additionally, the ad-supported streaming platform Pluto TV experienced growth in its monthly active users during 2023, although the company did not disclose user figures.

Like Peacock’s claims, Paramount is using the same playbook by stating that the steaming division hit “peak losses” in 2022 and expects the unit to become profitable in 2025.

Additionally, there are expectations that the company will reduce original content expenditures, particularly in local programming for international markets, in favor of prioritizing major hits, which could potentially impact future streaming growth.

Subscribers to Paramount+ outside the United States predominantly allocate nearly 90 percent of their viewing time to our globally recognized Hollywood content. However, sustaining engagement among these subscribers has significant financial implications, given the escalating production costs.

Paramount presents a compelling acquisition opportunity for a competent management team due to its extensive portfolio of original and library content, and premium offerings of films, series content, and sports programming.

FilmTake Away: To Merge or Bundle – That is the Question

With streaming bundling tie-ups becoming increasingly prevalent, the likelihood of Paramount Global being acquired rather than forming strategic partnerships looms larger.

Despite concerted efforts from both Paramount+ and Peacock to attract subscribers and establish themselves as enduring contenders in the streaming market, the uncertainty surrounding Paramount’s future casts a long shadow.