ViacomCBS CFO Naveen Chopra is ready to dial up the heat on streaming foes Netflix, Disney, Amazon and AT&T-owned Warner Bros.
Chopra — the former interim CEO of Spotify rival Pandora and more recently the CFO of Amazon’s devices business — joined ViacomCBS in August. The mission for the seasoned veteran: use his vast media experience to expand Viacom’s presence in streaming so it could capture its fair share of cord cutters migrating to newer platforms like HBO Max and Disney+.
The finer points of ViacomCBS’s game-plan — which center on expanding distribution of ViacomCBS’s extensive media assets and bolstering exclusive content — are expected to be shared at an investor event coming up soon.
“I think it will be a great opportunity to share some more about our plans for streaming in 2021, which is going to be a big year for us with the launch of Paramount+,” Chopra told Yahoo Finance about the forthcoming event on the digital sidelines of this year’s CES.
In September, ViacomCBS said it would be rebranding its CBS All Access streaming service to Paramount+ early in 2021. It will be one of the company’s main streaming platforms right alongside Pluto TV, which ViacomCBS purchased in 2019 for $340 million.
Paramount+ is expected to receive five new original series sourced from ViacomCBS brands Paramount, CBS, MTV and BET. Chopra said the new streaming platform will offer a “mountain” of entertainment as well as live news and sports.
“Those are things that have not frankly been well served through traditional streaming services. So we think we can bring something really new and add additives to that equation along with some great original content,” Chopra added.
What is unclear, however, is if ViacomCBS will head down the route of Warner Brothers and release some key 2021 movies (which shocked the movie theater industry) on its new streaming platform at the same time as movie theaters. The company has two potential movie blockbusters on its hands for this year: “Top Gun: Maverick” and “Mission: Impossible 7.”
“In terms of our distribution strategy, you know, the reality is the theatrical model is evolving. Simply put, that may be an understatement, given some of the moves that we pointed out that have been made over the last few weeks. I think our approach is probably a little less black and white in the sense that we do expect, as I said, things to evolve, we do think that theater windows are probably getting shorter not longer. We do think that the types of movies that will go into theaters versus the movies that may go directly to a streaming platform will evolve over time as well. But we we don't have sort of a one size fits all approach,” Chopra explained of the distribution strategy.
He added, “I think that you will see us continuing to use the theatrical channel, we do think that a lot of the content coming from Paramount will also be a great addition to Paramount plus. And so you know, we will be looking at it on a title by title basis. And you know, the reality is the way that operates in 2021 and the way that it operates several years from now will also probably evolve.”
To be sure, the Street is closely watching what comes out of the event. Shares of ViacomCBS have surged nearly 82% over the past six months, according to Yahoo Finance Premium data, amid optimism on streaming plans and cost-cutting efforts.
“We think everyone's numbers will likely change once management sheds more light on the direct-to-consumer path ahead. The stock could be worth more on lower numbers if the efficacy of the DTC strategy is sound, but it could also be due for a derating if the way forward doesn't inspire investor confidence,” said Wells Fargo media analyst Steven Cahall.
Indeed, focusing on streaming growth will be a good change of pace for Chopra and his new colleagues.
Since the ViacomCBS deal closed in December 2019, the combined company has been head down on extracting cost synergies. Those efforts have brought the sale of tech website CNET for $500 million in September to Red Ventures and the $2.2 billion sale of book publisher Simon & Schuster to Bertelsmann in November.
Chopra told Yahoo Finance ViacomCBS sees at least $800 in cost savings from the merger by the end of 2022. At the time of the combination, executives outlined $750 million in cost savings.
Now with those costs removed, the company must deliver big on streaming. Many analysts on the Street remain hopeful a legacy brand like ViacomCBS could pull off the pivot.
“As video consumption and related economics continue to shift to digital platforms, we view ViacomCBS as well positioned among media peers to evolve its business to support longterm growth,” Guggenheim Securities media analyst Michael Morris said. “In particular, the company owns significant television and film production and intellectual property assets, licenses impactful sports programming, and owns distribution technology across the traditional and digital video landscape.”
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