Paramount Global CEO Bob Bakish isn’t ruling out the possibility of the company teaming with other players in the media space to create a more viable streaming bundle.“We’ve been believers in bundling for a long time,” the exec said on the company’s second-quarter earnings call. “Bundling has been one of the tried-and-true methods of value creation in media and certainly as we enter the streaming space, bundling is part of our strategy.”The company’s quarterly report showed narrower streaming losses but only a modest gain in Paramount+ subscribers, to 61 million. The flagship streaming service integrated Showtime just before the June 30 end of the quarter, with higher prices accompanying the revamp. Revenue at Paramount+ — a majority chunk of the overall $1.7 billion in the Direct-to-Consumer division — increased 47% over the year-earlier quarter.Bakish noted that the company has long pursued bundling in various forms. Paramount+ and Showtime were offered as a discount-priced bundle when they were still separate services, and the company also created hard bundles with pay-TV operators, especially outside the U.S.Because of Paramount’s scale relative to tech giants as well as media rivals like Disney, Comcast and Warner Bros. Discovery, investors and industry observers have long speculated about its options. Many have predicted an M&A move, though the dust has only recently settled after the chaotic years that led up to the closing of the ViacomCBS merger in December 2019.Given the family control of the company’s shares and the significant regulatory hurdles standing in the way of a full-on merger, a streaming alliance could be a path forward. The need to consider such an initiative has only grown as the overall climate has grown more harsh to streaming, with Wall Street insisting on profitability rather than subscriber growth, and big questions looming about the economics of streaming. Paramount did enter into a joint venture with Comcast, SkyShowtime, which launched last year as a way for both companies to reach certain European markets with a less onerous financial commitment than a solo streaming effort.“We are continuing to look at incremental opportunities” in bundling, Bakish continued. “The only thing we know for sure is, it will be a growing part of what we’re doing. As to the specifics of partnerships and timing, et cetera, we’ll see. But bundling is definitely a value-added element of streaming because it gives you access to consumer connections … and has certain attractive margin characteristics. So, we like bundling.”Paramount+ With Showtime, which officially launched June 27, “is an example of pulling all these levers,” Bakish said, alluding to revenue growth via price increases, subscription gains and ad monetization, plus cost and operational efficiencies.Blending the two services into one — a move that will be mirrored in linear TV in the coming months — has generated $700 million in cost savings, Bakish said.The combination has also yielded “a stronger product for consumers and our partners, one that is more engaging with less churn,” he added. “For the last year or so, we’ve had a bundle of Showtime and Paramount in the market. Customers of that bundle consumed over 40% more titles” than those with single subscriptions to one or the other. “So, we have clear, predictive data that an integrated product will deliver enhanced consumer engagement in streaming and, soon, in linear.”
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