ViacomCBS said it expects to double its streaming content expense in 2021 in order to fuel the growth of its Paramount Plus and Pluto TV services.
Speaking on ViacomCBS’s first-quarter earnings call Thursday, CFO Naveen Chopra said that the company’s current total spending on content will increase “modestly” over the next few years.
ViacomCBS reported increases in streaming subscribers, monthly average users and steaming revenue for the first quarter.
Not all of the increased spending on streaming content will be incremental for the company as a whole, Chopra said.
“We do expect to continue to reallocate content from linear to either a shared context, where it’s doing double-duty on both linear and streaming, or exclusively on streaming.”
ViacomCBS CEO Bob Bakish said he expected to have an original movie on Paramount Plus every week in 2022.
In June, Infinite, a sci-fi thriller starring Mark Wahlberg will premiere exclusively on Paramount Plus in June, he said. That will be followed by the streaming premiere of A Quiet Place Part 2 immediately after its 45-day theatrical run. Also upcoming is the PAW Patrol Movie.
Original Paramount Plus films will start appearing by the end of 2021, he said.
Bakish added that while movies have been popular on Paramount Plus, it had a relatively thin catalog at launch. That will change, with the service adding 1,000 additional movies in June. Even more movies will arrive in July, bringing the total to more than 2,500.
In addition to movies, “when push comes to shove, our biggest investment area will be more originals,” he said.Chopra said the streaming spending plans were made before the company raised $3 billion by selling stock to support its streaming business.
“With the additional capital we now have the ability to invest more aggressively,” Chopra said. “I would expect that streaming content expense and total company expense should be somewhat higher, but very importantly over time.”
In addition to original programming ViacomCBS will pursue incremental streaming sports rights, accelerate international launches and continue to reduce the amount of content it sells to other streamers, he said.
Chopra said the impact of the spending the money raised in the stock sale will really start to be seen in 2022 and beyond.
“We’re obviously not going to spend $2.7 billion over night,” he said.
Looking ahead to the second quarter, Chopra said ViacomCBS expects “robust growth in streaming revenue with the Q2 growth rates for total streaming revenue, streaming advertising revenue and streaming subscription revenue all accelerating versus the Q1 growth rates.”
Bakish said the company is also looking forward to the $4.99 a month ad-supported version of Paramount Plus, which will launch in early June with broad distribution.
“It brings live sports, breaking news and entertainment including this expanded original slate to the market at a lower price point. That’s great from a consumer perspective for us,” he said. “It also has cost advantages which improve margins versus the legacy [CBS All Access] product, which will we be discontinuing from a new subscriber standpoint.”
The $4.99 a month product will help maximize total subscribers for Paramount Plus and it will give the company more high-quality premium streaming digital advertising inventory. “We see the product actually generating higher ARPUs over time than the $9.99 [ad-free] product,” Bakish said.
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Jon has been business editor of Broadcasting+Cable since 2010. He focuses on revenue-generating activities, including advertising and distribution, as well as executive intrigue and merger and acquisition activity. Just about any story is fair game, if a dollar sign can make its way into the article. Before B+C, Jon covered the industry for TVWeek, Cable World, Electronic Media, Advertising Age and The New York Post. A native New Yorker, Jon is hiding in plain sight in the suburbs of Chicago.