M&E Connections

CBS-Viacom ‘Recombination’ Comes at the ‘Perfect Time,’ Paramount CEO Says

The reunion of CBS and Viacom makes complete sense and couldn’t come at a better time, according to Jim Gianopulos, CEO and chairman of Viacom’s Paramount Pictures.

“It’s a perfect recombination of two great companies at the perfect time,” he said Sept. 11 at the Bank of America Merrill Lynch 2019 Media, Communications & Entertainment Conference in Beverly Hills.

After all, “the demand for content is greater than ever [and] some of our biggest competitors are focused on” their direct-to-consumer streaming subscription offerings, he said.

In addition to Paramount’s films, CBS, Paramount and Viacom will all retain their TV production capabilities, he told attendees. “When you add all that up, with a marketplace that has that level of demand, and then you add synergies, the opportunities to cross-fertilize talent and IP and all of that, it’s a good time” and “there’s many opportunities,” he said.

When Gianopulos joined Paramount in 2017, the studio lost $280 million, following a whopping $450 million loss the prior year. But the picture improved since 2017 for Paramount under Viacom’s current management.

“Being profitable is a good thing,” Gianopulos said. But he added: “Being profitable at the level that we should be is the next step.”

Asked about Paramount’s growth plans, including the possibility of any acquisitions, he said: “There’s no urgency on our part to reach out…. But there are also opportunities … perhaps in M&A opportunistically if things become available or become of interest, we’re always looking to expand our library, to expand our IP. And sometimes those may take the form of an acquisition. There’s nothing immediate…. There are other [strategies] that are synergistic and opportunistic that may not involve acquisition.”

Paramount is slated to have 16 movie releases next year and its release slate will likely be in the 18-20 range after that, he went on to say. Paramount Television, meanwhile, now has 26 series either on air or ordered for production, he noted.

He stressed the importance of Paramount’s content, explaining: “Library exploitation, which is the internal combustion revenue engine of any studio, wasn’t at its full optimal performance” a few short years ago, but “we’ve changed that.” Since 2016, library revenue is up 28% and operating income from the library is up 30%, he said.

On the subject of the exhibition window for new film releases, he suggested we’re unlikely to see any major changes anytime soon. One major reason for that is Disney, currently the top film distributor, has “no interest in changing the theatrical window,” he said. Film exhibitors, meanwhile, continue to combat efforts to narrow the traditional 90-day period of theatrical exclusivity for new film releases, he said, adding: “There hasn’t been an industry consensus about what that offering might be” and “nobody wants to go to war with their synergistic theatrical partner.”

Of the growing number of theatrical film loyalty and subscription programs, he told attendees: “It’s early days but so far we see it as a benefit.” These services, led by AMC in the U.S., have the potential to provide useful data about filmgoers and “the more that we can benefit from using those data analytics and outreach to that audience, the better,” he said. These programs also encourage more frequent moviegoing and more experimentation by consumers with the kinds of films they’re willing to see theatrically, he noted, adding: “It continues to broaden the market, to deepen the market, to expand frequency…. The key is for us to get our fair share. And so far, exhibition has recognized that.”