Paramount+ Biggest Challenge: Boosting Subscriber Engagement
If soon-to-be Paramount CEO David Ellison is to be believed, one of the oldest companies in Hollywood is about to morph into a one-of-a-kind tech-media hybrid.
“It is essential for Paramount to be able to expand its technological prowess to be both a media and technology enterprise,” the executive said on an investor call last week, unveiling his plans for the long-anticipated merger of Paramount and Ellison’s Skydance Media.
Key to that expansion, he added, will be an effort to “rebuild” the company’s flagship SVOD, Paramount+, presumably utilizing tech and techniques drawn from his father Larry’s tech giant Oracle.
“With the technological prowess and relationships that we have, we can expand our DTC business, we can improve our algorithmic engine to basically increase time spent on platform, reduce churn and drive lifetime value for all of our shareholders,” Ellison said on the call.
It’s an admirable goal, frankly, in an industry struggling to innovate and to maximize the potential of available tech. And based on his comments, Ellison seems well aware that the primary challenge of any consumer-facing tech platform is maximizing time spent on that platform.
Unfortunately, that’s a challenge Paramount+ will be hard-pressed to surmount.
To be fair, the Mountain is hardly alone in that. Most legacy media SVODs are struggling to increase time spent, and even Netflix has seen its engagement slip over the past two years, according to data from data measurement solution MIDG (featured in VIP+’s latest special report, “The Race to Replace TV”).
Still, Paramount+ does not exactly shine in comparison to its competitors. A key metric here is video engagements, or how much content users watched on the platform in the given month. Per MIDG data, despite its 71 million subscribers, Paramount+ notched only around 400,000 video engagements in March 2024 — less than half that of Peacock, which boasted only 34 million subs as of Q1.
Paramount+ users at least tend to spend more time than Peacock’s users do, though not by much: an average daily watch time of 1.2 hours versus 1.07 for Peacock in March.
The average Paramount+ viewer, in other words, is not highly engaged by the service, spending just over an hour on the SVOD on any given day. And that figure is down slightly from just two years prior, when the average viewer spent 1.25 hours per day on the platform.
The reasons for the SVOD’s paltry engagement partly come down to core elements such as its streaming catalog and content discoverability. It’s likely many consumers simply can’t find much on the service they want to watch, as evinced by its low video engagement statistics.
Again, however, this is not just a Paramount issue; the traditional media sector as a whole is struggling against the social video revolution (again, see this month’s VIP+ special report). This is why Netflix, for instance, is hard at work to expand its offering through initiatives including mobile gaming and why rival streaming companies have eagerly embraced partnerships through bundling.
Ellison appears to be following the roadmap laid out by his rivals: While explaining his plans for Paramount, he also touted Skydance’s “best-in-class interactive studio” — indicating an ambition to boost the company’s presence in gaming — and seems open to finding a partner for a streaming joint venture involving Paramount+.
But unless he’s got some truly revolutionary tech up his sleeve, Ellison may end up fighting a losing battle as SVOD continues to cede ground in the battle for consumer time and attention.
