Paramount Global (PARA.O) says it’s reached the peak of its pain from investing in costly streaming. The media company behind the Yellowstone franchise reported on Thursday that adjusted operating losses from its various direct-to-consumer services narrowed 31% year-over-year to a still-chunky $238 million. Crucially, boss Bob Bakish indicated that investment in streaming has topped out ahead of schedule, helping to send shares up 10%. Problem is, such discipline can only hold so long in a cutthroat market.
Bakish deserves credit for keeping a lid on costs, even if spending might have partly fallen because of Hollywood strikes that froze production of TV shows and movies. Turning around streaming losses is existential for old-guard media empires navigating the slow dwindling of cable and broadcast. But Paramount’s fundamental problem is that growing its share of viewers’ limited number of minutes in a day against competitors Netflix (NFLX.O), Walt Disney (DIS.N) and others requires compelling content. While its Paramount+ service has led rivals thus far this year in number of signups, according to data from Antenna, it is still smaller in terms of total subscribers. And its share of U.S. viewing time is ranked near the bottom of major streamers, well below Netflix, YouTube, Amazon.com’s (AMZN.O) Prime and Disney’s Hulu, according to Nielsen. Bakish’s promised restraint might not help scale the streaming challenge. (By Jennifer Saba)
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(The author is a Reuters Breakingviews columnist. The opinions expressed are their own.)
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