ViacomCBS VIAC has rebranded itself as Paramount Global, effective Feb. 17, and will be traded under the new ticker symbols “PARAA” for Class A shares and “PARA” for Class B shares.
What Happened: The Wall Street Journal reported the name change was announced during the company’s Feb. 15 investor presentation.
“It is who we are, and it is who we are destined to be,” said ViacomCBS Chairwoman Shari Redstone. “And that is why today we are thrilled to announce that ViacomCBS has become Paramount Global, or simply Paramount.”
The Paramount history stretches back to 1912, when Hungarian-born Adolph Zukor launched the Famous Players Film Company with the goal of offering feature-length films – at the time, most film presentations were shorts running one or two reels. Zukor imported the French production “Queen Elizabeth” starring theatrical legend Sarah Bernhardt, which ran nearly one hour and created a box office sensation that forced American film companies to begin focusing on longer films.
ViacomCBS CEO Bob Bakish acknowledged the renaming of the company was based on research into the brand viability of the CBS All Access streaming service. The company determined the Paramount name had greater recognition on a global level and was viewed by survey respondents as being synonymous with quality productions.
“Now anytime we talk about our company, we have the association with our flagship service,” Bakish said.
What Happens Next: The company’s leadership informed the investor presentation audience that it is planning to reach the 100 million-subscriber mark for its Paramount+ streaming service by 2024; the service added 7.3 million subscribers during the company’s latest quarter and now stands at 32.8 million total subscribers.
The company also operates streaming services for Showtime and BET and the children-focused service Noggin, which raises its total streaming subscriber number to 56 million.
The soon-to-be Paramount is banking on highly popular franchises to propel revenue, including the “South Park” and “Beavis and Butthead” animated series that will be spun into theatrical feature films and new episodes for exclusive streaming on Paramount+.
“‘South Park’ and ‘Beavis and Butthead’ are two of the most successful and widely known adult animation IP in the history of the genre, and I am thrilled that Paramount+ will be their exclusive new SVOD home,” said Chris McCarthy, chief content officer, unscripted entertainment and adult animation for Paramount+. “By expanding the universe of these franchises, we are unlocking significant value within ViacomCBS’ treasure chest of IP, and this is just the beginning.”
The company also produces the popular streaming series “Yellowstone.” But rival Comcast Corp. CMCSA snagged the U.S. rights to the series for its Peacock streaming service due to a deal that was signed prior to the merger of Viacom and CBS in 2019; Paramount+ has the international rights to the series and its spinoff “1883.”
In theaters, Paramount releases “Scream” and “Jackass Forever” were top-grossing films for their respective opening weekends, and the company is planning to dominate the lucrative Memorial Day weekend with the long-awaited release of Tom Cruise’s “Top Gun: Maverick.”
What Also Happened: However, not everyone is impressed with the company’s strategies. Jessica Reif Ehrlich, a research analyst at Bank of America Securities, downgraded the company this morning from Buy to Neutral and reduced its price target from $53 to $39.
“While subscribers have outperformed expectations, and should be robust in 2022, the long term margin guidance (low/mid 20%) for direct-to-consumer (DTC) business will not be achieved until the back half of this decade while the legacy business is under continuing pressure,” she wrote in her analyst note, adding the new price objective “represents a discount to peers, which we believe is warranted given the prolonged earnings and free cash flow impairment required to fund near term streaming investments.”
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