Paramount Global CEO, Bob Bakish, has expressed interest in exploring partnerships with other players in the media space in order to create a more viable streaming bundle. As the company’s second-quarter earnings call revealed, bundling has been a tried-and-true method of value creation in the media industry, and Paramount Global believes it can be an important part of its strategy in the streaming space. The company’s quarterly report showed narrower streaming losses and a modest gain in Paramount+ subscribers, reaching a total of 61 million. However, in order to further boost growth and profitability, Bakish acknowledges the potential benefits of bundling.
Paramount Global has a long history of pursuing bundling strategies in various forms. Prior to integrating Showtime into their flagship streaming service, Paramount+ offered the two services as a discount-priced bundle. Additionally, the company has created hard bundles with pay-TV operators, particularly outside of the U.S. These previous bundling efforts have allowed Paramount Global to test the market and understand the advantages of such strategies.
With Paramount’s scale relative to tech giants and other media rivals like Disney, Comcast, and Warner Bros. Discovery, investors and industry observers have speculated about the company’s future options. While a full-on merger may face regulatory hurdles, a streaming alliance could be a viable path forward. The streaming industry is facing increasing challenges, with Wall Street prioritizing profitability over subscriber growth and uncertainties surrounding the economics of streaming. Paramount’s joint venture with Comcast, SkyShowtime, launched last year and provided an opportunity for both companies to tap into certain European markets with reduced financial commitments.
Growth Potential and Value Creation
As Bob Bakish emphasized, Paramount Global is actively looking for incremental opportunities in bundling. The company recognizes the value-added element of bundling, including access to consumer connections and attractive margin characteristics. The recent integration of Showtime into Paramount+ demonstrates the potential for growth and value creation. This bundling strategy has resulted in $700 million in cost savings, as well as a stronger product offering for consumers and partners. The combined service has proven to be more engaging and has reduced churn. Customers who subscribed to the bundle of Showtime and Paramount consumed over 40% more titles than those with individual subscriptions. This data provides clear evidence that an integrated product can deliver enhanced consumer engagement in both streaming and traditional linear TV.
While specific partnerships and timing remain uncertain, Paramount Global is committed to expanding its bundling efforts. The company is well-positioned to leverage its scale and industry partnerships to drive growth and profitability in the streaming space. As the media landscape continues to evolve, bundling will likely play a key role in capturing consumer interest, generating revenue, and solidifying Paramount Global’s position as a leader in the streaming industry.
Paramount Global CEO Bob Bakish recognizes the value of bundling as a method of value creation in the media industry. With the streaming space becoming increasingly competitive, partnerships and bundling strategies offer a path forward for growth and profitability. Paramount Global’s integration of Showtime into Paramount+ has demonstrated the potential for enhanced consumer engagement and cost savings. As the company continues to explore opportunities in bundling, it is poised to solidify its position in the streaming industry and drive further success in the future.