Will NCIS Sydney be enough to save Paramount?

Olivia Swann as NCIS Special Agent Michelle Mackey and Todd Lasance as Sergeant Jim Dempsey in Paramount’s new series NCIS Sydney. Picture: Supplied

There might be plenty of flashy shots of Bondi Beach, but will the hit show NCIS Sydney be enough to snap the US media player and owner of Channel 10 out of its doldrums?

The New York-based Paramount the owner of movie studio behind Top Gun and the CBS and Nickelodeon television network has seen a rebound in December quarter earnings, but it wasn’t enough to head off a full year loss of $US608m ($935m), with the media player buffeted by the Hollywood writers’ strike, slowing free-to-air advertising revenue and continued deep losses across its global streaming platform Paramount+.

Paramount is being closely watched as it falls further behind in the scale game, and its parent company Shari Redstone’s National Amusements have been exploring options including a possible merger with Warner Discovery or a break-up of parts of the business. All this could have implications for the longer term ownership of the Channel 10 network, that runs a distant third in an increasingly tough free-to-air market in Australia. The December quarter update didn’t break out numbers from its Australian TV business.

NCIS Sydney had a strong debut on US network television with Bondi Beach used as a backdrop. Picture: Supplied

Paramount’s global boss Bob Bakish stayed silent around any bigger strategic plays on an investor call earlier Thursday, but there was plenty around his plans for shrinking the business and hacking into the $12bn media company’s cost base. The group recently axed 5 per cent of its workforce, including jobs in Australia, although it’s not all bad for local staff.

Bakish talked about using Paramount’s offshore workforce to do more work than would normally be done in the US. Already, some of CBS’ behind-the-scenes work is done out of Channel 10’s Pyrmont offices.

This is also where shows like NCIS Sydney come into the picture. The hit franchise has based its latest spin-off in the Harbour City. The series was produced in Australia “at a much more efficient price point and was the most watched new show this season on any network in the US,” Bakish told investors.

A new series of another hit show Billions, which follows fictional hedge fund boss Bobby Axelrod, will be produced in London to help with costs, he added.

The update also delivered an insight into how the global steaming wars are evolving. Paramount+ is battling it out in a crowded market with players like Disney, Netflix, Apple Amazon and a string of domestic rivals including Foxtel’s Binge and Nine’s Stan. Disney’s Bob Iger has been trying to draw a line under streaming losses, a year ago he declared he intended to chase profits over the long held mantra of subscriber growth.

Paramount is the owner of US network CBS, which has been battling an advertising downturn. Picture: Getty Images

This has led to an aggressive round of price hikes and seen others quickly follow, including Paramount+. At the same time, there have been big cuts on content spending. The past year is widely seen as the beginning of the end of the golden age of television spending.

Paramount+ is a relative newcomer in the streaming space and has also been generating billions in losses for its parent. Paramount itself is a product of 2019’s merger of CBS and Viacom.

Profitability is the new mantra for Bakish. Paramount last calendar year lost $US1.66bn on streaming from $US1.82bn the year earlier. The losses came about even after adding 4.1m subscribers in the December quarter. Paramount+ now has 67.5 million globally, by comparison Disney has around 150 million.

Bakish believes Paramount+ has now passed “peak losses” in streaming and is on track to be profitable in the US next year, although this doesn’t take into account international losses. The shift in the coming year will be leveraging Paramount’s extensive Hollywood library and shows like Yellowstone.

While shows like NCIS Sydney travel globally on liner TV and streaming, there’s not so good news for other local content on the Paramount+ platform.

Bakish was not specific about Australia but noted Paramount+ international subscribers “spend nearly 90 per cent of their time with our global Hollywood hits” instead of sports. He sees this as best path to keeping subscribers engaged “while right-sizing investment in content that does not travel around the world”.

In Australia, both Network 10 and Paramount+ have the rights for the A-League and W-League series until the end of this season. Paramount has previously lobbed a $1bn-plus bid for a long term cricket rights deal but lost out. It has also commissioned other shows for its Australian platform.

For now, it seems peace is breaking out in global streaming, but this will mean hard adjustments for some.

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