EXCLUSIVE ViacomCBS’s Paramount+ ‘thinks local’ to go global with streaming
When the reality series “The Challenge: War of the Worlds” launches on four continents in June, ViacomCBS Inc aims to test a key component of its streaming strategy – using localized content on broadcast TV to attract subscribers to its Paramount+ streaming service, an executive with the entertainment conglomerate told Reuters.
The media giant is launching four versions of the show and airing them on its broadcast TV networks in the United States, Australia, the United Kingdom and Argentina, and streaming episodes on Paramount+ globally the following day, Chris McCarthy, chief content officer for unscripted entertainment and adult animation at Paramount+, said in an interview ahead of his presentation to investors on Tuesday.
Contestants will be reality TV stars from those countries, and the winner from each version will compete in a ten-episode “War of the Worlds” that will air on Paramount+ globally beginning in August. The series is a spinoff of a show that has aired on ViacomCBS-owned MTV for 38 seasons.
ViacomCBS is betting that inexpensive content that can be localized for different markets will help it compete in a global challenge of its own: the race by U.S. streaming services to claim subscribers outside the United States, a market that is becoming more important as streaming services mature.
Production costs for unscripted television are only 10% to 30% those of a scripted series, and the shows are easier to localize for global markets, according to McCarthy. Streaming rivals including Netflix Inc have been pushing into the genre in recent years.
To further reduce costs, ViacomCBS will produce all four international versions of “War of the Worlds” – in which contestants vie for prize money through a series of puzzles and physical challenges – and the final global competition at the same location in Argentina. Production costs are two-thirds what they would be if each of the four broadcast channels produced them independently, McCarthy said.
Reality competition helps to retain viewers who subscribe to the service for live sports, he added.
“Live sports and reality competition are really the same viewer,” McCarthy said. “And when we look at the average cost of that same consumer, it’s much lower when we put those two things together.”
ViacomCBS has plans to launch Paramount+ in 45 markets by the end of 2022, and is playing catch-up to rivals. read more
As of Nov. 17, Paramount+ and Showtime OTT had 48 million global subscribers. AT&T Inc (T.N)-owned HBO and HBO Max had a combined 73.8 million subscribers at the end of 2021; Netflix has 221.8 million subscribers and Walt Disney Co’s (DIS.N) Disney+ has 129.8 million subscribers, according to the companies.
Paramount has committed $2 billion to streaming content this year and $5 billion by 2024 – a figure dwarfed by the investments of Netflix and Disney+ but in line with Comcast Corp’s plans for U.S. content spend for its Peacock streaming service over the next couple of years.
Reality TV is a staple at ViacomCBS, three decades after its MTV cable network created the genre with “The Real World.” “The Challenge” was a “Real World” spinoff that was originally called “The Real World/Road Rules Challenge.” New seasons still premiere on MTV before moving to Paramount+, even though the latest spinoff – “The Challenge: War of the Worlds” – will not air on cable.
If the strategy for “The Challenge: War of the Worlds” is successful, McCarthy said, ViacomCBS is likely to replicate it with the majority of its competition series, such as the tattoo artist show “Ink Master” or the drag queen competition “Queen of the Universe.”
Within the genre of unscripted television, competition series like “The Challenge” do the best job of driving subscribers in mature markets like the United States and Australia, said McCarthy.
In emerging markets like Mexico, where “telenovela” soap operas are still popular on broadcast TV, “docu-reality” series such as “Jersey Shore” and its spinoffs including “Acapulco Shore” perform well on broadcast TV, cable and streaming.
The strength of “docu-reality” in emerging markets is why ViacomCBS is launching seven new global versions of its “Shore” franchise on Paramount+ in Argentina, Columbia, Croatia and other markets.
An episode in the “Shore” franchise costs between $100,000 and $300,000, said McCarthy, compared with $2.5 million to $10 million an episode for a scripted show, on average.
“If you get one really, really successful unscripted that’s a runaway hit, the economics of that are going to be massive because production costs are so low,” said CFRA analyst Tuna Amobi. Reporting by Helen Coster in New York Editing by Kenneth Li and Matthew Lewis
This article was originally published by Reuters.