“Our priority is to expand our role as a major global content supplier,” Gianopulos said. “As such, we’re exploring various new revenue streams in addition to our traditional theatrical releases as a producer of first-run films and television for other media platforms.”
The companies have collaborated across the studio’s operations under Gianopulos, who became CEO of Paramount in March 2017. At the TV studio, Paramount has supplied Netflix with popular series such as Maniac and 13 Reasons Why. The film unit broke new ground last winter by selling The Cloverfield Paradox to the streaming service, an abrupt change of plans two months before a planned theatrical rollout. Netflix then mounted a stealth release on its streaming platform on Super Bowl Sunday in February, advertising it on TV the night of the big game. Viacom CEO Bob Bakish at the time indicated an openness to such deals in the future, especially given the cost savings and the healthy price Netflix paid, reportedly in the range of $50 million.
Gianopulos didn’t offer specifics as to the number or names of projects included in the overall deal, saying it would be “a small number of titles” that would leverage the co-venture “when and where it makes sense.”
Well before Gianopulos arrived at the studio after a long run at Fox, Paramount and other majors had gotten to know Netflix as a buyer of library titles. The aim of the new arrangement is to extend the ties into the original content phase for streaming services.
“‘We’ve had a long relationship with Netflix,” the studio chief noted. “On the licensing side, we’ve known the senior management team for many years. This represents an incremental revenue stream that we’re excited about. We have more capacity for great production than the theatrical system can accommodate. While [theatrical] remains our core business, we’re very happy to work with the likes of Netflix, Amazon and others as partners and new customers.”
Content spending by Netflix, Amazon, Hulu and Apple in 2018 combined to exceed $20 billion, Gianopulos said. “While they have increased their internal capabilities, they are looking for great properties and we have great IP, great development and great creative relationships and potential to develop for them,” he added.
“In some ways, it’s just an evolution from the days when studios were making MOWs [movies of the week] for the networks,” Gianopulos continued. “The difference, of course, is that the quality of some of these films is much higher, making these relationships even more valuable. And it plays to the strength of a large, well-established studio like Paramount.”