Paramount Stock Nosedives After Making A Huge Decision
Paramount stock took a major hit this week after they tied their business to one key thing and it didn't perform all that well
Streaming is the future of film and television content. Definitely, for sure, isn’t it? That will be the question being asked in the newly renamed Paramount Global headquarters as the companies stock has taken a bit of nose-dive following the latest Paramount+ announcement. The report comes from Deadline and states that Paramount stock has dropped a whopping 20 per cent since Paramount’s Investor presentation on Tuesday.
On the 16th, a major part of Paramount’s announcement was the rebranding of the parent company ViacomCBS to Paramount Global. Along with this, the company announced a $6 billion investment into its streaming platform Paramount+. This investment was a statement of intent and Techradar reported it will be spent on content across the platform in a bid to breach the 100 million subscriber mark. Despite this Paramount Stock has taken a hit. Nonetheless, the streaming intention has been made.
This echoes the former sentiment from Paramount, as some months back the company made noises of scaling back on the cinema blockbuster in favor of streaming. It would appear, however, that this strategy may have backfired, and is reflected in this negative Paramount stock plunge. This comes amidst a trend that has emerged across the streaming world, that possibly value has peaked. During the pandemic, of course, streaming saw incredible growth.
The Guardian reported that in 2020 Netflix added a record 37 million subscribers. Disney plus only took sixteen months to hit the 100 million subscriber mark. However, of late Netflix subscriber growth has taken a downward turn, and Wall Street has reportedly wiped a whopping $300 billion combined from Netflix and Disney Plus. It would appear that Paramount has committed to the streaming game at the wrong time.
What should be most alarming for Paramount, however, is that Netflix and Disney have a huge catalogue of content/IP and are still seeing a decline in stock value. Paramount doesn’t have the same back catalogue to fall back on. As of 2024, their films will exclusively be available at Paramount+, the likes of Mission Impossible, Transformers etc. As well as this, the streamer has already renewed Halo for a second season before the initial season premiere. The series is based on the iconic videogame franchise of the same name and will hopefully draw in subscribers to fight the worrying Paramount stock value curve.
The streamer is working on a whole host of original content and time will tell if this will alleviate the concerns of investors and turn the tide of the Paramount stock value. Projects included on the slate are a Knuckles TV series and a host of films based on Teenage Mutant Ninja Turtles villains. Deadline also stated that Paramount subsidiary Showtime is in talks to acquire Starz and their parent company Lionsgate (Hunger Games being a part of their work).
This move could be a boon for Paramount stock. There is certainly a lot of content in the works for Paramount and a lot of work going into their streaming platform. Will it pay off? Or has streaming reached its peak? If by 2024 Paramount+ has surpassed its subscriber target of 100 million, we can all come to the conclusion that the gamble worked. For now, though, it’s all hope and speculation amidst the might of Wall Street.
