The influx of competitors with Netflix — among them Apple, Disney, WarnerMedia and NBCUniversal — means “our content is more desirable, more unique and more available than others, and that puts us in a really good position,” he said. Three Paramount Television shows, Gianopulos noted, are in the works at HBO Max, which will launch next spring.
Gianopulos also covered hot topics like Viacom’s pending merger with CBS; the impact of the Disney-Fox and AT&T-Time Warner deals, the state of release windows; and doing business with Netflix.
Moderator and BofA Merrill analyst Jessica Reif Ehrlich noted the turnaround at Paramount on Gianopulos’ watch. The year before the longtime former Fox exec came through the Melrose gate in 2017, the studio had booked an operating loss for the year of $445 million. “That’s about as dark as it gets, particularly for a major studio,” Gianopulos said. “Those numbers should never exist.”
As the broad industry push into direct-to-consumer streaming continues, he said, release windows will likely undergo some shifts, though the primary theatrical window appears safe for now. “It’s possible that they will at some point shorten the [home entertainment] window and get the benefit of most of the transaction revenues in a shorter period of time to the DTC offering, which is essentially Pay-1,” he said.
Direct-to-consumer streaming, he continued, “may blur the lines between what was Pay-1 [premium cable] and free TV [ad-supported cable or broadcast] because that sort of flows together. It’s not clear yet whether these companies would exploit their content on their DTC platform and then go outside and give it to a free TV third party, or just keep it and have it continue to be part of the consumer offering.”
Premium video on demand — a scheme that could collapse windows and offer movies day-and-date — is nevertheless unlikely to gain traction anytime soon, Gianopulos said. “There’s certainly a chance,” he reasoned. “I wouldn’t say those discussions are dead, but they are certainly stagnant. You have the leading distributor in Disney showing no interest in doing it.”
One less dramatic scenario, he added, would be a shortening of the primary theatrical window, which could be “a way to take some heat off the issue. … No one wants to go to war.”
Paramount’s main output arrangement is about to undergo a major change in the coming years. Its long-term deal with Epix, the outlet now controlled by MGM, will lapse in 2022. Epix began in 2009 — ancient history in media terms — as a joint venture involving Paramount, Viacom and other partners. The arena of premium output deals has changed radically since the days when HBO, Showtime and Starz were the only options. Lionsgate’s recent pact with Hulu and FX to replace its own Epix deal (which expires this year, earlier than Paramount’s), is a sign of the times.
The lively amount of pay-1 competition, with digital players now fully in the mix, “is a party,” Gianopulos said. “It’s going to be a lot of fun” finding a new home for Paramount titles. Reif Ehrlich asked if the notion of making a deal with a third-party company is viable even though Viacom is about to recombine with Showtime parent CBS. “Yes, I do think that’s a possibility,” Gianopulos said. “That’s a conversation that will take place.”
Beyond the Viacom-CBS re-combination, Gianopulos said Paramount or its parent could end up being the one to acquire other entities, he said. “There’s always change, there’s always turbulence,” he said. “And in that regard, some of the smaller companies may find themselves in need of shelter from the storm or support in distribution or support in finance to better exploit their IP.” (He stopped short of naming any specific companies.)
Paramount will continue doing feature business with Netflix, which it has done more aggressively than most, selling off Cloverfield Paradox in 2018 and then announcing a multi-picture deal with the streaming giant.
Gianopulos said the sub-market of developing films for streaming resembles the one for movies-of-the-week titles decades ago.
“Not all of it is viable theatrically,” Gianopulos said of the studio’s film slate. “But it’s all well-developed, quality IP. Why not put it to use?”