With its stock price plunging, Paramount Global defended its strategy of investing to try to become a player in the high-stakes streaming wars.

Paramount on Wednesday reported that third-quarter profits fell 57% as its direct-to-consumer businesses lost $343 million. The news helped send Paramount’s already depressed stock down about 10% in midday trading. 

Wall Street soured on the shiny new streaming business after industry leader Netflix announced a loss of subscribers in the first quarter. Netflix’s stock plummeted, taking all of the traditional media companies looking to pivot to streaming down with it. The transition to streaming is expensive, requires scale and some analysts question whether Paramount is big enough to be a contender — especially as its traditional TV business erodes.

Also: Wells Fargo Downgrades Paramount Again, Says It Should Become an ‘Arms Dealer’

But speaking on Paramount’s earnings call Wednesday, CEO Bob Bakish and chief financial officer Naveen Chopra defended the company’s strategy.

Chopra told investors and analysts that streaming would be an important and financially rewarding part of the Paramount portfolio.

“Streaming offers a total addressable market which is more than twice the size of linear,” Chopra said. “The incredible ease of consumption with a vast array of content available at home or on the road, in whatever format you want, ad-free or ad-supported, means we can connect more consumers with Paramount content than ever before.”

This year, Paramount said it will exceed its expectations for direct-to-consumer growth of 75 million global subscribers.

That would mean more revenue.

“We expect streaming to be accretive to ARPU [average revenue per subscriber] over time. In fact, streaming ARPU already exceeds linear ARPU in some international markets,” he said, pointing to the U.K. as one example.

“It’s worth noting that there are streaming services in the market today with ARPU comparable to or higher than the monthly revenue we generate per linear household, and we believe Paramount Plus will achieve these levels of ARPU overtime with the implementation of price increases and continued growth and engagement and advertising monetization,” Chopra said.

Yes, price increases are coming.

“We definitely see opportunities to increase price on Paramount Plus and you will see us do that in the future,” he said. 

"It’s fair to say that pricing is moving higher across the industry,” Chopra said. We think that means we have room to increase price and ultimately drive ARPU while preserving our value position relative to others.” Because Paramount Plus has different tiers and packages, including its Essentials tier, Chopra expects to be able to serve price-sensitive users and minimize churn.

Profitability will follow.

“We believe long-term operation margins in streaming will approach TV media margins,” he said. 

Paramount’s multiplatform approach — combining linear and streaming, ad-supported and ad-free, along with theatrical distribution of films — will yield efficiencies in marketing, provide the company with promotion for Paramount Plus and provide more ways to monetize content. These cost efficiencies do not exist in a pure-play streaming business model, Chopra said.

Bakish acknowledged that in the short term, the company is facing macroeconomic headwinds that are hurting revenues by accelerating cord-cutting and depressing the advertising market.

But “we are also taking aggressive, precise actions to gain additional efficiency across our cable networks, streaming platforms, advertising sales, marketing and global operations,“ Bakish noted. ”These will yield cost savings next year as well as long-term strategic benefits.”

Specifically, Paramount has announced that its Showtime Networks, Showtime OTT and Paramount Television Studios operations have been melded into other Paramount units. The company also restructured its advertising sales unit and is making changes in its international unit.

Chopra said the cost-cutting efforts could lead to a fourth-quarter charge against earnings. He said the savings would be “meaningful and sizable,” but declined to attach a dollar amount to either the charge or the expense reductions Paramount is expecting.

Bakish noted that cost cuts would benefit Paramount when the economic cycle turns again.

After each downturn since 2001, he noted, there were quarters of particularly robust ad growth. 

“Yes, we do have some macro-driven softness and all the people are talking about it, but as it always does, this market will turn around and that’s when you’ll see real benefit from our positioning as a market leader,” Bakish said. ■

While the potential to some day produce new "James Bond" and "Rocky" movies out of Amazon Studios provided a sexy news angle to Amazon's just-closed $8.45 billion purchase of MGM, it's the infusion of an MGM library featuring more than 4,000 film titles and 17,000 TV series episodes that will likely have more immediate impact on Amazon's video business.

Undoubtedly, Amazon will try to monetize many of these MGM library titles -- which include films Silence of the Lambs, Thelma & Louise, Midnight Cowboy, Fiddler on the Roof, Dances with Wolves and Raging Bull -- through advertising via its growing IMDb TV platform. And that will further add scrutiny to an merchandising strategy that is somewhat unique to Amazon -- regardless as to whether a title is part of the Amazon Prime Video subscription smorgasbord, or part of the IMDb TV AVOD portfolio, or a "transactional" recent release movie title available for rent, Amazon bundles them all together under one "Prime Video" app interface. 

Amazon indicates already paid (Prime Video subscription), ad-supported and rental content with little labels that go in the upper left hand corner of thumbnails on the Prime Video interface. 

Also read: The Amazon Prime Video ‘Purge’: Why the Massive SVOD Library Appears to Have Fewer Titles to Binge on These Days

On Thursday, tech blog Protocol predicted that Amazon will "double down" on ad sales, with MGM content on IMDb TV being a primary focus. 

Amazon, Protocol said, "seems perfectly content using IMDb TV as a vehicle to stream ads to Prime subscribers as well, setting it apart from the way Disney and others approach advertising in a subscription video context. Instead of providing a cheaper tier to customers willing to watch ads, Amazon simply presents IMDb TV as a free add-on."

Also read: Amazon Just Paid a 40% Premium to Buy MGM — What’s It Really Getting?

Speaking at a Deutsche Bank investor event earlier this week, Paramount Global CFO Naveen Chopra didn't call out Amazon by name. But he seemed to come pretty close to implicating the tech giant when he remarked, “If you want to have both ad-supported and subscription, we think it is important to keep those things separate. 

"It’s very confusing for customers to have all that in one service and not really understand, ‘Is this free? Is this pay? What content do I get and where?’ We have the ability with Pluto to really shout from the rooftops that Pluto is free. And then we have the ability to position Paramount+ as the destination for high-quality content," Chopra added. ■ 

ViacomCBS said it has named former Amazon executive Naveen Chopra EVP and chief financial officer, replacing Christina Spade, who will move into an advisory role at the company after its second quarter earnings results are released.

Chopra joins Viacom from Amazon, where he was CFO of its Devices and Services business. In his new role, Chopra will be responsible for ViacomCBS’s financial operations, including treasury, tax, accounting, investor relations, information security and real estate, as well as global corporate development and strategy. Chopra will report to ViacomCBS president and CEO Bob Bakish.

“Naveen is a talented leader who combines financial, strategic and operational expertise with hands-on experience growing innovative, consumer-focused businesses across the media and tech sector,” Bakish said in a press release. “His experience scaling and driving the financial strategies for growth businesses – including free ad-supported and subscription streaming, as well as with digital devices and services – will be instrumental as we continue to unlock the value of our assets.”

Prior to Amazon, Chopra spent two years as CFO of audio streaming service Pandora, serving for a period as its interim CEO. Chopra also was CFO at TiVo, where he led core strategy initiatives, including its sale to Rovi Corp. in 2016. Chopra also spent six years on the board of directors at Vonage Holdings, and is a member of the board of KQED San Francisco, one of the nation’s largest public media organizations.

“I am thrilled to join ViacomCBS at this exciting time,” said Chopra. “Since its merger, the company has gained strong momentum amidst a rapidly evolving landscape by leveraging its subscription and advertising businesses, diverse distribution channels, formidable library and strong content pipeline. I look forward to working closely with Bob and the team to apply my experiences across consumer products and services, streaming and digital advertising to help write the next chapter of this amazing company.”

Spade has spent more than two decades at Viacom, and led the company’s financial operations through the merger that created the company in 2019. Previously, she served for six years as EVP and CFO and Strategy for Showtime Networks, where she stewarded the implementation of key financial operational and reporting systems and helped scale Showtime’s streaming platform when it was launched in 2015.

“I am grateful to Chris for her many contributions to ViacomCBS, including her two decades at Showtime and CBS and the pivotal role she played in the integration of CBS and Viacom. I want to extend my deepest thanks to her for her leadership and counsel, and for helping to ensure a smooth transition,” Bakish said in the press release. 

Naveen Chopra, the former TiVo exec who led the company through its merger with Rovi, has been appointed chief financial officer of online video service and discovery service Pandora.

Chopra, who takes on his new role Tuesday (Feb. 28), heads up Pandora’s Pandora’s finance, corporate development and strategy, investor relations, facilities and CIO functions, and reports to company founder and CEO Tim Westergren.

Chopra succeeds Mike Herring, who was Pandora’s CFO since March 2013, and assumed the role of president in March 2016, where he will continue to focus on growing Pandora’s ad and subscription businesses. 

Notably, Pandora is integrated with several set-top platforms, including Comcast X1 boxes, certain Dish Network and DirecTV Receivers, Verizon Fios boxes, and TiVo-powered devices.

Chopra most recently served as interim CEO of  TiVo and as the company’s CFO and SVP of corporate development and strategy. TiVo was acquired by Rovi last September, with the combined company carrying the TiVo name forward. Chopra, who joined TiVo in 2003, stayed on temporarily as an advisor after the Rovi acquisition closed.

RELATED: TiVo Names Naveen Chopra Interim CEO

“After a thorough and thoughtful search process, we are thrilled to welcome Naveen aboard,” Westergren said, in a statement.  “Naveen is a talented business leader whose deep knowledge and background in consumer-oriented technology companies make him the right choice as our new CFO.”

“Pandora fundamentally changed the way we listen to music and continues to lead the way in reshaping the future of music for listeners, music makers and advertisers,” added Chopra. “It’s an exciting time to join the team and a unique opportunity to combine my passion for world-class consumer services and strategic and operational experience to help guide Pandora’s growth and deliver shareholder value. I look forward to working closely with Tim, Mike and the entire Pandora team.”

Chopra holds bachelor degrees in computer science and economics from Stanford University and an MBA from the Stanford Graduate School of Business. He currently serves as a member of the board of directors of Vonage Holdings Corp.

The proposed $1.1 billion merger of Rovi and TiVo has caused some analysts and observers to see it as a major patent play that will give the combined company more opportunities to drive revenues from lawsuits.

Though a combined company would create a company with a significant patent portfolio focused on video, it’s incorrect to interpret the deal as a “patent play,” Naveen Chopra, TiVo’s interim CEO, SVO and SVP of corporate development and strategy, said Wednesday at the Jefferies 2016 Technology Conference.

The deal, he said, “was not premised on a patent strategy,” but one that is really about creating a bigger products company, a bigger operating company, with more diversity of revenue, more diversity of customers, more diversity of products.”

Though patent fees create upside, “it’s really not the main story here,” he said. “Perhaps the best indication of that is the fact that the company going forward is going to be called TiVo which is something you do if you want to maintain the TiVo product, the TiVo brand, the TiVo interface, and those are really the things that will be driving a lot of the growth going forward.”

Earlier in the discussion, Chopra noted that TiVo’s business has also evolved in recent years, away from hardware to more toward software and services.

TiVo’s business, he said, “has evolved substantially over the last seven or eight years to be at a point where frankly, the hardware is a minor component of the business today.”

And when TiVo enters discussions with MSOs, “they’re not coming to TiVo talk to talk about DVR;  they’re not coming to TiVo to talk about a box. They are coming to TiVo to say, look we need to take our video product to the next step, we need to make it more current, we need to embrace OTT and that’s where our software and our services come into play.”

That said, TiVo’s retail/consumer business remains “highly strategic for us,” as it continues to drive the company’s product roadmap.

Signaling a greater emphasis on MVPD partnerships and a reduced focus on its retail strategy, TiVo is pushing ahead on a restructuring and reorganization that will affect about 50 full-time employees and a number of contractors.

“Our priorities are North American MSO growth, International expansion and consumer innovation that can take the company beyond the domain of the traditional DVR,” Naveen Chopra, TiVo’s chief financial officer and interim CEO, told employees Monday (February 29) in a memo obtained by Multichannel News.

Chopra noted that Cubiware, a middleware provider that TiVo acquired last year that will help the company expand into more international markets, and Digitalsmiths, a video recommendation and analytics unit that TiVo bought in 2014, “will be critical ingredients in pursuing these priorities.”

“As part of ensuring we are optimally positioned to succeed in these areas, today we made the difficult decision to eliminate roles filled by about 50 full-time TiVo employees and some contractors,” he continued. “While it is never easy to say farewell to colleagues and friends who have made major contributions to the company, these decisions will enhance our growth and performance going forward.  We are sincerely grateful for the collective contribution of those who will be leaving us and we will fully respect and support their future endeavors.

Word of the restructuring comes about a month after Chopra was named TiVo’s interim CEO. Tom Rogers, TiVo’s long-time CEO, stepped down from that role last month, but is remaining with TiVo as non-executive chairman of the board.

Since taking on the interim CEO role, Chopra said in the memo that he’s been setting priorities for TiVo, and “matching our talent with our most promising growth opportunities.”

Most of TiVo’s growth has come from MSO partnerships. The company ended its fiscal Q3 with 6.46 million subscribers, a figure that included 5.51 million coming way of TiVo's partnerships with MVPDs. TiVo's MSO partners include Virgin Media, ONO, RCN Corp., Mediacom Communications, Suddenlink Communications, Buckeye CableSystem, Atlantic Broadband, Cogeco, Armstrong, Grande Communications, and GCI, among others. 

“Although we will be losing some loyal colleagues, I am incredibly excited about what we can achieve following these restructuring moves,” Chopra wrote. “We will be speeding up, not slowing down.  We will be challenging many of you with new, bigger, broader responsibilities.  And most importantly, we will be building a nimbler, more profitable TiVo that is better equipped to innovate and grow."

TiVo is expected to discuss the changes in more detail when the company reports Q4 results on Tuesday (March 1).

Though TiVo is placing a greater emphasis on North American MSO growth and international expansion, it isn't abandoning the retail market, a company official said.

TiVo, for example, will continue to support and bring new features to products such as the new 4K-capable Bolt device and its Roamio DVR family. The company, Multichannel News has learned, is also expected to introduce some new retail-focused products later this year that are not traditional DVRs. 

TiVo said its board has named Naveen Chopra, the DVR and video software company’s current CFO, to interim CEO, effective Jan. 30, 2016.

Chopra, who joined TiVo in 2003, succeeds Tom Rogers, who is stepping down as CEO at the end of the month, but will remain with TiVo as non-executive chairman of the board.

Prior to TiVo, Chopra held exec slots at several tech-focused companies, including HP, Microsoft, Moxi Digital (now part of Arris), Ispiri and Ofoto.

"I look forward to continuing to work with my talented colleagues to grow value for our shareholders," Chopra said, in a statement. "Moving forward, we will be highly focused on product innovation, accelerating profitability, enhancing subscription growth, and securing new distribution agreements across an expanded geographic footprint -- in addition to safeguarding TiVo's invaluable intellectual property."

"Naveen is the perfect choice to serve as interim CEO," added Rogers. "He and I have worked incredibly closely for the last 11 years, and he deserves tremendous credit for much of the progress TiVo has made in becoming the global leader in advanced television. I am enthusiastic about continuing to work with Naveen as we step into our new roles at TiVo."

TiVo also announced that Wendy Markus Webb, currently CEO of Kestrel Corporate Advisors,  has joined the company board and its audit committee, effective January 11. She is also an independent director of ABM Industries, PetSmart Charities, Inc. and 9 Spokes, and has previously been with The Walt Disney Company, Tennenbaum Capital Partners, Ticketmaster Entertainment, PaineWebber Inc. and Lehman Brothers.

Dan Moloney, TiVo’s lead independent director and a former Motorola and General Instrument exec, called Webb “a valuable addition to TiVo's board of directors as we advance TiVo's position in the global market and continue our search for a permanent CEO.” 

TiVo ended its fiscal Q3 with 6.46 million subscribers, a number that includes 5.51 via TiVo's partnerships with MVPDs.