The dominance of Netflix and Disney in streaming has forced many companies to join forces. So far, Paramount has gone its own way.
In January, the board of Paramount, including Shari Redstone, the company’s chair, met with a group of bankers to get an update on the media industry and to hear about potential deals that might help the company better compete with streaming giants like Netflix and Disney. The bankers, from Goldman Sachs and LionTree, came with many deal ideas, according to four people with knowledge of the meeting. The most logical one, the bankers said, was combining some parts of Paramount — which owns networks like Nickelodeon and MTV, and the Paramount+ streaming service — with those owned by Comcast, the cable giant that owns NBCUniversal and the Peacock streaming service. The two companies already have a streaming joint venture in Europe. But in the end, the board, Ms. Redstone and Bob Bakish, the company’s chief executive, did not feel compelled to pursue any of the combinations. They would continue to zig while Hollywood zagged. That is, Paramount — with its collection of streaming services including Pluto TV and Showtime in addition to Paramount+ — would keep going it alone. The fast rise of streaming has reshaped the media industry in just a few years as companies have felt pressure to spend billions on new TV shows and movies to attract enough subscribers to compete with the industry’s giants. MGM, the famed movie studio, sold to Amazon. And Discovery combined with WarnerMedia, the film and TV giant behind “Game of Thrones” and “Succession.”
Not Paramount. Since the company was created from the merger of Viacom and CBS three years ago, it hasn’t sought another big deal. Instead, the company has been trying to build its own profitable streaming business before the flow of cash from traditional TV, still its big moneymaker, runs dry. In interviews, both Ms. Redstone and Mr. Bakish said that Paramount, with its global footprint, its streaming businesses and the movie studio behind the new hit film “Top Gun: Maverick,” would have success on its own terms.
“In many respects we continue to be the underdog, and that’s OK,” Mr. Bakish said. “But I think as time goes on, people will continue to increasingly see that Paramount is powerful.”
Ms. Redstone and Mr. Bakish still have to persuade much of Wall Street. In the years since Ms. Redstone championed the effort to unite the two halves of her family’s media empire — Viacom and CBS — to form Paramount, the value of the combined company has fallen significantly. The day the merger was announced, in August 2019, Wall Street valued both companies at $29.6 billion. Today, Paramount is worth $22.1 billion, a 25 percent decline. The share prices of Paramount’s competitors, including Disney and Netflix, have also declined over the same period. Rich Greenfield, a co-founder and analyst at LightShed Partners, a research firm, is skeptical that Paramount can survive on its own. Paramount’s streaming business is growing quickly, but it’s still not profitable, Mr. Greenfield said. And much of the audience for Paramount’s signature content — think MTV and Nickelodeon — has shifted to new-media platforms like TikTok and Instagram.
