Kate Bulkley considers the impact that subscription streaming platform Paramount+ could have in a crowded UK market.
The UK launch of streaming service Paramount+ last month was accompanied by a showbiz spectacle featuring such celebrities as Graham Norton, who presents the service’s drag singing competition, Queen of the Universe, and Kevin Costner, star of Yellowstone. They took to the red carpet and Uma Thurman fronted a star-studded promo video.
Best known as a movie studio, Paramount hopes this legacy, along with its numerous TV brands, which include MTV, Showtime and Nickelodeon, and originals series such as Star Trek: Strange New Worlds and another sci-fi hit, Halo, will present a compelling mix to subscribers. But with so much choice in the UK market and people grappling with a cost-of-living crisis, can Paramount+ cut through and mount an effective challenge to Netflix, Disney+ and other incumbent players?
Recent consumer research by Omdia found that 41% of UK households with a streaming subscription already have three or more services. Will they pay for another one? “Netflix, Amazon Prime and Disney+ are the top three in the UK,” says Tim Westcott, Omdia senior principal analyst, digital content and channels. “Breaking into that top three is going to be a tall order.”
Paramount+, costing £6.99 a month but free to Sky Cinema subscribers, launched with 8,000 hours of content spanning movies, new originals and other TV shows, plus library fare.
Received SVoD wisdom is that, to be a success, Paramount+ must find the exclusive hits that will drive subscribers to pay for the service – as Netflix has traditionally done with the likes of The Crown, Sex Education and, recently, Squid Game.
Paramount+ is trying to mirror the Netflix originals formula with US-made 1883, The Offer, Mayor of Kingstown and Super Pumped: The Battle for Uber, plus Showtime’s The First Lady and The Man Who Fell to Earth.
But most importantly for the UK market, the streamer announced 19 locally commissioned dramas, documentaries and other unscripted content, including Sexy Beast (from Chapter One), A Gentleman in Moscow (eOne), Flatshare (42), The Burning Girls (Buccaneer Media), The Ex-Wife (co-produced by Clapperboard Studios, BlackBox Multimedia, Night Train Media and All3Media International) and The Blue (New Pictures).
On the unscripted and documentary side there is Fashion House (Lambent, All3Media International and Night Train Media) and Blowing LA (Fulwell 73 and Endeavor Content), among others.
“A key feature of Paramount+ is that we are going to build upon UK scripted and factual production,” says Dan Fahy, senior vice-president for streaming, UK, at Paramount.
The company is well established in the UK through its ownership of the thriving Channel 5, as well as pay channels MTV and other ViacomCBS brands. Omdia’s Westcott notes that Paramount “could always move new commissions on to Paramount+”.
‘The breadth of the offer is going to be the biggest subscription driver for us’
Despite the announcement about original productions, some analysts believe that Paramount will still focus on its established franchises to attract early subscribers.
“Local productions are important for generating publicity and column inches and good for promoting a new service, but I think Paramount will focus more on the known brands,” says Westcott. “What will be important for Paramount+ in the UK is a first window for new original series and movies – which I believe will go on to the streamer 45 days after cinema release. More of the appeal will be around big brands such as Star Trek and South Park.”
Fahy emphasised the wide range of Paramount’s content, which caters for all age groups and both men and women: “There will be some big calling-card franchise names but it’s actually the breadth of the offer that’s going to be the biggest subscription driver for us,” he says.
“It’s true that we have some strong franchises such as Transformers, which is a theatrical title that we are building into a kids’ animated series,” adds Fahy. “It’s the same with Sonic [the Hedgehog], where we are doing an animated series with Idris Elba as the lead character’s voice. So, yes, we do have strong franchises that cross over from film, to TV series, to kids – but there are also standalone projects that are not designed with a franchise in mind.”
A recent global slowdown in subscriber growth at Netflix has cast a certain pall over the whole SVoD market. The US streamer reported a net loss of subs in the first quarter 2022 of 200,000 and predicted that it would have lost a further 2 million by the end of June. The news has caused many observers to expect a new focus on profitability, rather than adding subscribers regardless of the cost.
Indeed, the slowdown validates plans by Netflix and Disney to add advertising tiers to their subscription services later this year. In the UK, Paramount+ will also face the launch of ITVX, the broadcaster’s new, primarily ad-supported, streaming service expected to debut in November.
Paramount+ is launching ad-free. Its ownership of the My5 on-demand service and Pluto TV (an ad-supported streamer of both on-demand and streamed TV channels) means it is already well-served in the ad-supported streaming business.
“We view all our services in the UK, including Channel 5, as being complementary to each other,” says Fahy.
“On the night of Paramount+’s launch, we premiered the first episode of Halo on Channel 5 at 10:00pm,” notes Fahy. “We have Channel 5 content building FAST [free advertising supported TV] channels on Pluto, and MTV content on My5 and on Pluto. So, there is a kind of flywheel of audience direction and reinforcement between the services because none of them sit in the same segment as each other.”
But Guy Bisson at Ampere Analysis cautions that Paramount is “not a particularly known brand in the UK”, certainly not beyond film.
Another issue is how to avoid consumer frustration with discovering content they might want to watch. “Content exclusivity alone as a draw for a streaming service is past,” says Richard Halton, director at Roku UK. “Now, it’s about innovating the service itself and our focus is on how we help consumers discover and navigate to the shows that they want.”
After the UK, the international rollout of Paramount+ will continue, with Italy, Germany, Switzerland, Austria and France expected by the end of this year and India set to launch in 2023.
Paramount may be late to the streaming party, but Paramount CEO, Bob Bakish, believes the timing is right. “We think streaming is a great opportunity,” he told the Financial Times. “We’re in investment mode and will increase our content investment in 2023. But, beyond that, we see momentum building and, ultimately, see streaming having very TV-like margins.”