Marco Nobili says its Australian business will continue to produce local TV shows, despite a global strategy to focus on Hollywood hits. The growth strategy of Paramount+ in Australia is a combination of bundling with distribution partners and offering an affordable ad-tier to grow audiences and provide advertisers the opportunity to reach them across linear TV, SVOD, BVOD and FAST TV in a single trade.
Paramount has doubled down on its commitment to produce Aussie TV shows with a high production value across its suite of linear TV, BVOD, SVOD and FAST TV services, placing Australia in a unique position within Paramount’s global network.
The business also plans to grow Paramount+ by offering an affordable basic ad-tier subscription service and striking more partnerships with companies that can distribute the SVOD in bundled packages, one example is a partnership with Qantas.
Earlier this year, Paramount CEO Bob Bakish said the business was planning to streamline its operations – including some cuts to headcount – by “driving to streaming profitability” and “maximising content with the biggest impact”. Essentially, this means fewer local, international originals.
B&T caught up with Paramount+ international general manager Marco Nobili, and the local head of Paramount and chief content officer Beverley McGarvey to discuss its content, growth and commercial strategy ahead of the roll out of more affordable ad-tier later this year.
“Our intention is to maximise our US studio content across the board, we’ve seen that content performing very, very well in all of the different countries Paramount+ streams,” Nobili said.
“That does not mean that we’re not going to invest in local content, particularly in this country where we have a great ecosystem. Australia is certainly one of those countries, like the UK, that stands out because we have strong free to air business, BVOD and paid streaming service. So we’re going to continue to develop content and try to make the best out of that content across all of our channels.”
One example of this working is an Australian version of the US hit NCIS. Nobili explains that NCIS Sydney (pictured below) hasn’t just been a success Down Under, but has exported well to the US and other markets. A second season of NCIS Sydney is already on the cards.
The crime drama Last King of the Cross, about notorious Sydney ganglands figure John Ibrahim is another Aussie hit that is attracting eyeballs in the US, UK and elsewhere.
‘A win win’
McGarvey said the business benefits from Paramount’s Hollywood productions because it provide the scale and the scope to invest in more local productions.
“The brilliant thing about streaming is as audiences shift and their viewing habits change, to continue to be able to invest in top tier local content, you really need to be able to get utility out of it,” McGarvey said
“So for us to be able to make NCIS Sydney has played on Paramount+, and done a great job, but it will play on Ten later this year. So that is not something without Paramount+ we would ever have the scope to invest in. The Hollywood content is great because it helps us scale the business and allows us to invest locally in Australia.”
McGarvey said that Paramount has a content obligation to produce 55 per cent Aussie content on its linear TV offering.
‘We can offer advertisers scale’
Paramount’s commitment to Australian content comes after a difficult year for Paramount and linear TV more broadly.
Globally, Paramount lost $490 million from streaming in the final quarter of 2023, even though it grew subscriber numbers by more than 4 million to 67.5 million. Paramount+ doesn’t release Aussie figures but McGarvey described it as the fastest growing SVOD in Australia.
In Australia, ad spend in linear TV fell by 8 per cent to $3.6 billion in the 12 months to June 2023, according to Think TV, although there have been some signs of the market stabilising since then.
Some of this leakage is going into advertising on SVODs such as Netflix, Binge and Kayo. From June, Paramount+ will roll out an ad-tier subscription of $6.99 in Australia, following similar moves in the US and Canada.
The intention is to retain and attract more subscribers to the platform at a time when many viewers are looking to cut back on the number of subscription services.
“From a local point of view, the price point is really critical. We know that there’s a cost of living crisis and our price point is very affordable,” McGarvey said. “When our sales team go to market, they’re able to offer a trade across a great deal of reach across Paramount+, the linear TV business, 10 Play and Pluto TV FAST channels with one transaction.”
“There is a massive demand for advertising on streaming, when you have a certain amount of scale. The great thing for us is that we will have scale straightaway, because we can offer scale through some of the other businesses. And then we can offer hard to reach customers who have normally been behind the paywall. If you talk to (Paramount ANZ Chief Sales Officer) Rod Prosser, advertisers are banging down the door even though the door isn’t quite up yet.”
A reboot of Top Gear Australia is another top notch production that shows Paramount’s commitment to local content.
We Will Grow The Pot
Paramount is betting that a basic ad-tier will help grow subscriber numbers in Australia and drive up the amount of revenue it can earn from each user instead of cannibalising revenue from audiences that may be tempted to downgrade to the cheaper ad tier.
“It’s great because it continues to increase the advertising pot overall. What we have seen from our experience in the US is that there is not much difference between the basic tier from a standard tier from an ARPU (average revenue per user) standpoint,” Nobili said.
“The advertising revenue makes up for the lower price point and I believe we will get some good traction and grow the audience that we can attract to the service. This is not only a great choice for customers and advertisers, but also very economically viable for the company.”
The cheaper price point is not the only way in which Paramount+ intends to grow its audience. The media company is exploring more partnerships with content distribution partners – a strategy it has used in other countries.
“We were one of the first players from a pure play streaming service that has done large distribution bundles across the world. We’ve entered Europe with big bundles with (satellite TV companies) Sky and Canal, and we’ve done a huge bundle in the United States with Walmart and airlines like Delta. In Australia we’ve done a distribution partnership with Origin and a marketing partnership with Qantas.”
Paramount’s ability to grow and monetise audiences at a time they are leaving linear TV will be critical for the business, especially as more global SVODs eye Australian eyeballs and ad dollars.
