How Paramount+ became a top contender in the streaming wars

Tom Ryan is used to being an underdog. In fact, he prefers it.

When Ryan launched Pluto TV on April’s Fools Day in 2014, most people thought it was comically apropos given that he was entering a streaming video on demand space dominated by Netflix with a free, ad-supported linear TV service. Fast forward to 2022, and Pluto TV surpassed $1 billion in revenue with nearly 79 million monthly active users. Paramount Global (formerly ViacomCBS) acquired Pluto TV in 2019, which still operates as its own entity. Soon after, Ryan was appointed president and CEO of Paramount Streaming facing another Herculean task: make Paramount+, rebranded from CBS All Access, a premier contender in the streaming race.

“We launched late and, I think we’ve been seriously underestimated by a lot of the market,” Ryan says.

Despite Paramount’s vast content spread across its film, sports, and news divisions, as well as being the home to networks including Nickelodeon, VH1, MTV, and Comedy Central, going direct-to-consumer with a streaming service was by no means a shoe-in for success. Consumers’ dollars are forever stretched across any combination of streaming services and some analysts believed Paramount didn’t have sufficiently strong brand awareness to compete with the likes of Disney, HBO Max, and Netflix.

However, in just two years, Paramount+ has grown to 56 million subscribers, adding an impressive 9.9 million this past quarter alone. Paramount+’s subscriber count doesn’t yet stack up to Netflix (230 million), Disney+ (161 million), or HBO Max (96 million). But smart content plays and strategic partnerships have given the streamer come lately an edge.

“Underdogs don’t take their positions for granted—they have to work smarter. And, ultimately, you learn how to do more with less,” Ryan says. “Paramount is a major media company with a tremendous amount of content assets. But it’s still competing with much larger corporations in this streaming space.”

With Wall Street now prioritizing profitability from streamers versus top-line subscriber growth, Paramount may not be as behind as some may think.

According to Parrot Analytics, Paramount ranks third in corporate demand share, an assessment of media corporations’ content value across all its networks and properties. Paramount (12.2%) is behind Warner Bros. Discovery (18%) and Walt Disney company (20.2%), but edges out NBCUniversal (10.2%) and Netflix (8.4%). Parrot Analytics can’t measure live sports or news, so it’s possible Paramount could be in even better standing, primarily due to it being one of the NFL’s broadcast partners and because of a recent deal for the U.S. televised rights to the Union of European Football Associations (UEFA) soccer matches.

“[Paramount+] seemed like just a rebrand, which it effectively was,” says Wade Payson-Denney, PR and communications manager at Parrot Analytics. “But they have carved out a pretty solid niche.”

To Ryan, that niche, two years in, is just a foot in the door to the larger prospects he envisions for Paramount+.

“The mandate [when being named CEO] was to grow the business to be a real player in paid streaming from a very small scale,” he says. “And we’re achieving that. We’re a force to be reckoned with in streaming today.”

Riding out the streaming storm

For much of the streaming wars, top-line subscriber growth was the carrot that major players were chasing, which has led to bloated content budgets to entice audiences to sign up. However, when inflation put the economy in a chokehold last year, streaming services—a must-have at the height of the pandemic when people were stuck at home—suddenly became less of an essential luxury. All streamers took a hit, but Netflix’s stock had a dizzying plummet as subscribers dropped en masse. Being the industry bellwether, Netflix’s tumble sent the resounding message that having a more defined path to profitability was the new, and clearly more realistic, metric.

That reality check has forced some of the industry’s top players to pivot. Last year, Warner Bros. Discovery went on a drastic culling spree while Netflix introduced a cheaper ad-supported tier. In February, Disney CEO Bob Iger said that the company is exploring licensing some of their film and TV shows in lieu of keeping their content exclusively under Disney+ and Hulu.

“We’ve entered a phase of more conservative investment,” Ryan says. “I feel good about the more balanced approach that we’ve taken.”

Paramount’s acquisition of Pluto TV, which had already amassed around 12 million users at the time in 2019, gave the company an established in with a free ad-supported service (on top of Paramount+ launching with its own cheaper ad-supported tier), as well as an avenue to upsell Pluto TV users on Paramount+ or to keep them in the fold should they churn out of Paramount+.

“Being able to address the largest overall market of customers is something we’re well positioned to do,” Ryan says.

Historically, Paramount has had lucrative licensing deals, doling out some of its hit shows to other streamers. While you can still catch NCIS on Netflix or South Park on HBO Max (despite a recent legal tussle), Paramount Global CFO Naveen Chopra let it ring that Paramount will no longer license any of its big franchise IP to third parties. It’s no secret that’s due in large part to NBCUniversal scooping up streaming rights to Paramount’s record-breaking series Yellowstone in 2020 for its service Peacock.

Even still, what seemed like a fumbled opportunity to boost Paramount+ subscribers through what’s become one of the most-watched TV shows in America was wisely flipped into a sprawling franchise with show creator Taylor Sheridan building out his own universe of Paramount+ originals spun off from Yellowstone—1923 and 1883—as well as other well-received dramas including Tulsa King and Mayor of Kingstown.

“That’s really impressive,” says Parrot’s Payson-Denney. “As far as I can tell, that’s the first time one of these streamers has created an expansive TV franchise effectively from scratch.”

F is for Franchise

The “Sheridan-verse” is a just one example of Paramount’s content strategy, which Tanya Giles, chief programming officer of Paramount Streaming, describes as the three F’s: franchises, familiar faces, and fandom.

On deck for Paramount+ is a prequel to Grease centering on the Pink Ladies, as well as a reboot of the classic 1980s thriller Fatal Attraction. The streamer also premiered an adaptation of the widely acclaimed video game Halo last year that’s set for a second season. Fans of SpongeBob SquarePants got an origin story of the show’s beloved characters with Kamp Koral that also landed a second season. Not to mention that there’s the ever-expanding catalogue of Star Trek shows—a franchise that, under executive producer Alex Kurtzman, has run the gamut of live action (Discovery, Strange New Worlds, Picard), children’s animation (Prodigy), and adult animation (Lower Decks).

In total, there have been six Star Trek spinoffs since 2017. But Kurtzman, who has quite a history with franchises having produced or written such TV shows as Clarice [spun off from The Silence of the Lambs], Hawaii Five-0 (2010), The Mummy (2017), and the Star Trek movies (2009, 2013), doesn’t feel as if Paramount’s push for franchises is going the way of mindless cash grabs.

“As many shows as we have, none of us are interested in being in the volume business,” Kurtzman says. “The minute you set your compass toward volume business is the minute that you begin to lose discernment about why you’re making each show.”

As heavily as Paramount has leaned into its stable of intellectual property, no streaming service can subsist on franchises alone. It’s almost like a rite of passage for a streamer to notch an original series that captures a massive audience or sparks a cultural moment outside of an existing fandom. House of Cards is what initiated Netflix’s runaway trajectory and it’s since had a string of massive originals including Orange Is the New Black, Stranger Things, and 13 Reasons Why. HBO consistently breaks into the zeitgeist with buzzy shows including Insecure, Euphoria, and The White Lotus. Hulu had its first cultural moment with The Handmaid’s Tale. Amazon Prime’s The Marvelous Mrs. Maisel was an awards darling, as Ted Lasso has been for Apple TV+.

Paramount certainly has an immense catalogue across its networks, and tucking Showtime into the streamer only gives it more. But it hasn’t quite cracked a major Paramount+ original hit. As well-liked as Sheridan’s shows outside of Yellowstone’s timeline have been, they haven’t matched the magnitude of his original creation.

“They’re wisely opening the door to what other franchises are in their stable. I think once that foundation is firmly established, they will also have more room for things that aren’t franchises to succeed,” Kurtzman says. “I’ve heard that from them. They don’t just want to be in the franchise business. It’s obviously very important to them, but they want to grow in a lot of different directions.”

Maximizing partnerships

A key part of growing in different directions has also meant strategic partnerships, namely Paramount’s deal with Walmart to offer Paramount+ to subscribers of the retailer’s membership service Walmart+.

The deal makes total sense given Walmart’s many doomed attempts at creating its own streaming service. For Paramount, catering to Walmart’s largely middle America customer base falls in line with their goal of creating entertainment that appeals to the masses. Paramount also scored a deal with Delta, offering Delta SkyMiles members, the airline’s free-to-join loyalty program, access to Paramount+ in-flight. Jeff Shultz, chief strategy officer and chief business development officer at Paramount Streaming, sees stretching Paramount+ across different partnerships as a way to resurface TV shows or films that they believe haven’t reached their full potential with audiences.

“In many ways we’ve kind of done the hard part. I think 1923 is a masterpiece—1883, same. Tulsa King is awesome. As much work as those shows have done for us, they’re still dramatically underexposed,” Shultz says. “If we can get that in front of consumers on a plane, that’s going to create an incredible opportunity to continue to grow.”

Similar to offering Paramount+ in-flight, Shultz says they’re exploring a more “interesting model” for hotel partnerships that’s more than logging into your account through the TV.

“I never had to talk anybody into partnerships being a priority,” Shultz says. “The company understood that partnerships could be a key catalyst for growth. And you can trace that all the way back to Pluto—one of those catalysts that helped us grow so far, so fast was recognizing the opportunity in connected television.”

It’s odd to think of a multi-billion dollar corporation as being any kind of scrappy upstart. But Paramount making its streaming bid so late, particularly around the time of reckoning for many in the space, didn’t necessarily portend the rapid growth that the company has seen. For Ryan, the strategy now is doubling down on the company’s existing strategies.

“We’ve taken a much more measured approach. Our team really does embrace this underdog approach to building, and our strategy is working,” Ryan says. “We’re starting to get a lot more recognition for the businesses that we have built.”