ViacomCBS does not plan on joining the ranks of Netflix, Disney and most recently AT&T’s WarnerMedia in pulling its brands off Amazon’s Prime Video channels — at least not right now.
That’s because ViacomCBS, which currently offers access to streaming service Paramount+ and pay-TV channel Showtime via Prime Video Channels, thinks this wholesale way of adding consumers is equally important to its direct relationships with customers.
“We continue to believe in broad and ubiquitous distribution, really, as a path to scale. And that includes wholesale relationships, including with [Amazon],” ViacomCBS chief Bob Bakish said during the company’s third-quarter earnings call Thursday, which came just after the reveal that Paramount+, which just became the new home of CBS drama “SEAL Team” (pictured above) and Showtime OTT, boasted nearly 47 million subscribers globally by the end of Q3.
“Now, there’s obviously, tradeoffs in terms of a wholesale versus a direct relationship,” Bakish said. “Those tradeoffs tend to be around requests for certain times of exclusivity, data access, margin. So it’s not a black-and-white question, the question is, do you have deals in place which make sense relative to those considerations?”
Bakish says that he and his colleagues have given “a lot of thought” to that question and that has actually led them to pass on “some deals,” though he did not reveal which wholesalers ViacomCBS didn’t end up striking pacts with. He also noted that other agreements “take longer to get done than certain people would like, because the deal has to be right.”
On Sept. 15, the currently AT&T-owned (but soon to be Discovery-owned) WarnerMedia stopped offering HBO subscriptions through Amazon Channels in the U.S., a decision the company made in hopes of expanding and cultivating its direct customer relationships.
With the loss of the roughly 5 million HBO subscribers who accessed the pay TV channel through Amazon Prime Video Channels, WarnerMedia anticipated that its HBO Max and HBO domestic subscribers tally would take a big hit in Q3, going so far as to offer a promotional deal to cut the cost of HBO Max in half to lure back any users it was about to lose.
Ultimately, HBO and HBO Max shed a total of 1.8 million U.S. combined customers between Q2 and Q3, from 47 million to 45.2 million. But the company was able to make up all those losses, and then some, with new global subscriptions — racking up a total of 69 million customers across global platforms by the end of September.
“When you think about how we’ve grown 1.9 million worldwide, and even when you think about the Amazon exit, which we think is a very strategic decision that three companies really have made so far, which includes Disney and Netflix being the other two, we feel very good about the quarter,” WarnerMedia CEO Jason Kilar said during the company’s Q3 earnings call last month.
Bakish said Thursday that as ViacomCBS seeks to scale its streaming operations the company continues to believe in the “benefit” of wholesale relationships like the one it has with Amazon. The ability of wholesalers to provide “access to the largest total addressable market” is what ViacomCBS “strongly” believes “offsets some of the other considerations — again, assuming you have the appropriate deal structure,” he said.
“So we like the balance model,” Bakish concluded. “Of course, it’s something we’re going to continue evaluate over time, as we scale, but we see value in these distribution channels today.”
