Sunday, May 16, 2021

Nickelodeon Content Was a Key Driver For Paramount Plus Subscriber Growth During Q1 2021

ViacomCBS revealed during their Q1 2021 earnings report and conference call that Nickelodeon programming was one of the key drivers of sign ups for the company's recently launched streaming service, Paramount+!

Some of the most watched Nickelodeon content watched on the platform during the first quarter of the year included the SpongeBob SquarePants universe (classic episodes and exclusives Kamp Koral: SpongeBob's Under Years and The SpongeBob Movie: Sponge on the Run), the original iCarly series and PAW Patrol.

Globally, Nickelodeon programming was a significant driver of sign-ups and engagement on Paramount+, helping global streaming subscribers to rise to 36M in Q1, adding 6M subscribers.

Upcoming Paramount Plus highlights include Nickelodeon's Star Trek: Prodigy, a CG-animated Rugrats reboot (May 27), a iCarly revival (June 2021), and PAW Patrol: The Movie.

ViacomCBS CEO Robert M. Bakish talked more about how Nickelodeon has been a key driver of Paramount+'s success during the company's Q1 2021 earnings call:

"On Paramount+, the biggest drivers of sign-ups were live sports and specials, including the Super Bowl, NCAA Tournament, UEFA Champions League, Oprah with Meghan and Harry and The Grammy Awards, as well as kids’ content, including programming from the SpongeBob universe and iCarly, and original programming, including The Stand and Star Trek: Discovery. Original programming, content from cable brands and Paramount movies drove almost half of Paramount+ subscriber engagement.


Nickelodeon in particular is turning into a powerful driver of subs and engagement probably more quickly than we would have thought. It's a clear sub driver since the relaunch and it now accounts for a strong double-digit share of streams. And that's really because of the combination of compelling exclusive originals, of course, the SpongeBob movie, Sponge on the Run and the new Kamp Koral series combined with a big known library. That's a recipe that clearly works. I think it's also worth noting that the SpongeBob franchise in totality, quickly moved to the top of the rankers at Paramount+. And probably what's most important here is this is an example of us replicating our strength in a legacy linear position here in kids in streaming. And we've also seen early positives from unscripted and reality as well as movies. So early days for Paramount+, but we very much like what we see in terms of consumer reaction to the product and as you know, based on that we're leaning in even more.


I want to just dig in a little bit deeper into the comments about what people are actually doing on Paramount+. It seems like Nickelodeon just looking at like sort of the top shows every day, seeing things like SpongeBob and Paw Patrol, it seems like they are driving a very substantial part of viewership and wondering, like, when you look at sort of the promotion you talked about sports and some of the stuff that you have and certainly it had some originals, but it looks like the kids' stuff is really driving viewership. I guess a big picture question is like, you said double-digits, like is it half the kids, like how substantial is kids' programming and how do you get more viewership of some of the adults skewing fair, I'd be curious how you're thinking about the marketing message because it seems like kids has been a very powerful force for you? And then I just want to follow up on two things; one, you said you haven't commented are Paramount+ subs higher today than 36 million, could you give us any clarity on that? And then I think you mentioned one movie -- one original movie a week in 2022, does that include the 45 day after movies that are coming out in theaters or is that a dedicated original movie every single week, I just wasn't clear of what you meant by that?


So on Paramount+ and kids, clearly kids is working for us. And no, it is not half of the consumption. Again, material double-digit percentages, but nowhere near half. What's driving that relative to the other call it genres and demographics is really the fact that we were able to at launch provide not only critical mass of library product, which we can do in other categories, but volume of exciting, exclusive, originals link to known franchises. And that in particular was the combination of the SpongeBob movie, which obviously was a theatrical movie, we chose to redeploy on Paramount+, and the new SpongeBob series Kamp Koral. We had that ready to go because we had a movie for theaters and because we had a series that we were going to launch on Nickelodeon, call it linear.

As you look forward, those kind of things start to happen in the other genres. I mean, I'm very excited about what's going on with reality. As you know, we launched with Real World New York, it was only a couple episodes, so it wasn't really volume. And MTV, The Challenge, there was a little more volume, but it's the first series. As the year plays out, we basically have one new exclusive original in the reality space and unscripted space every month. So that's more fuel for that tank and that should start converting that genre lane for Paramount+, and we will market that particularly leveraging our linear networks and social where we know those fan bases are.

The other one I'd really highlight is movies. I mean, we have Paramount -- we have movies on Paramount+ today, but frankly not that many of them. That game changes dramatically in June, where we first dropped an additional 1000 and there are real movies, they're not deep library. Then we late in June have Infinite, which can create a lot of noise. I've seen the films on film, people love Mark Wahlberg. And then that leads to more -- a lot more, I call it library, again not deep library, including pay one library in July, and then quiet place on a short window from theatrical leading into later in the summer Paw Patrol. So we got a lot going on. And people love movies, in premium television. They love movies in streaming, they are based on engagement, love movies on Paramount+, we just don't have the volume we're about to have.

Let me use that to actually go to your third question for a second, which is around a movie a week, does it include short window, pay one or not? Yes, it includes short window pay one, call that a dozen pictures a year. The original movie per week will be an exciting movie per week. It will be a range of different kinds of movies. Some of them will be blockbusters that are heavily marketed from theatrical, the quiet place to type films. Some of them -- the vast majority of them will be made for Paramount+, those will be sourced from Paramount through our Paramount Players studio or sub studio, as well as through other studio operations we have including Nickelodeon. As you know, we have the Awesomeness side of Nickelodeon, which has done a great series of YA movies, including for streamers. So really excited about deploying that and getting that to have something on the platform every week that's fresh for someone to watch.

That will be followed by the streaming premiere of A Quiet Place Part 2 after its 45-day theatrical run and we will follow that with the Paw Patrol movie, a treat for families eagerly awaiting a feature length version of the most popular preschooler character in the world.


From IGN:

Nickelodeon, Once a Possible Casualty of the Streaming Wars, Is Paramount Plus' Future

Nickelodeon is key to Paramount+'s success

Between 2010 and 2020, Nickelodeon lost more than 60% of its audience.

Snapped up by Netflix, YouTube, Amazon, and other streaming-first or user generated content platforms, Nickelodeon began to feel like a product of a bygone era. It didn’t necessarily matter that Nickelodeon was still the most popular kids network on cable TV; the issue was cable TV was bleeding customers as cord cutters turned to streaming alternatives.

Kids content was arguably more susceptible to the changing tides. Children are more digital friendly, and cheaper mainstays like YouTube Kids, Netflix, and Disney+ provided an always-on, ad-free, constant alternative to a television schedule. Nickelodeon executives were aware of their declining ratings. There were some options throughout the mid-aughts — NickHits launched on Roku and Amazon Prime Video Channels, while Viacom (now ViacomCBS) licensed some of Nickelodeon's most popular shows to Netflix.

Some helped, but none really stuck the landing. Until Paramount+ launched, and Nickelodeon found its new moment.

Bookended with classic Paramount films and live sports, Nickelodeon became part of a bigger general entertainment streaming package that caught people’s attention. If kids were spending more time watching entertainment online, Nickelodeon would meet them where they were. It’s working, according to ViacomCBS CEO Bob Bakish.

Yes, Spongebob Squarepants is still popular.

“Nickelodeon, in particular, is turning into a powerful driver of subs and engagement, probably more quickly than we would have thought,” Baskish said. “It's a clear sub driver since the relaunch, and it now accounts for a strong double-digit share of streams...I think it's also worth noting that the SpongeBob franchise in totality quickly moved to the top of the rankers at Paramount+.”

In layman terms, Nickelodeon is a primary reason people are signing up for Paramount+. This may seem obvious, but the battle for kids content is only just heating up for three reasons:

1. Kids watch a lot of television

2. Having kids content on a streaming service makes the service a necessity not an option

3. Streaming becomes multi-generational

Ever Heard of Paw Patrol?

Saying kids consume large amounts of television is an understatement. In 2020, the American Academy of Child & Adolescent Psychiatry found that “children ages 8-12 in the United States spend 4-6 hours a day watching or using screens,” on average. They’re increasingly spending more time watching things online, mostly split between Netflix and YouTube.

While YouTube is the most popular platform among kids, it poses a threat that parents hate: It’s completely unregulated and there are risks that children will come across content they shouldn’t. Netflix is better. Disney+, arguably the best. Anything that goes on Disney+ is certified Disney. Not only are parents paying for a brand they know their kids will enjoy, but it’s safe.

Netflix is getting into the kids game, but there are still two companies whose brands are synonymous with children's television: Disney and Nickelodeon. When developing a general entertainment service (as opposed to a niche offering like Criterion), not playing to kids’ interest is a nail in the coffin more often than not. Even Apple is trying to find its way into the kids market, partnering with Skydance Animation — a studio run by former Pixar chief John Lasseter. (Lasseter left Pixar after allegations of sexual harassment were brought forward.)

But whereas Netflix and Apple have to try and come up with kids programming that draws tykes in and keeps their attention, Nickelodeon, Disney, and Cartoon Network, which has found its home on HBO Max, don’t have to try as hard to convince consumers they have the goods. As Brian Robbins, president of Nickelodeon, told Variety last year, “franchises are so important in a world where there is so much content being made.” See: a Star Trek cartoon airing on Nickelodeon. Big franchise plus big network ideally equals audience recognition.

Again, it can seem obvious, but brand recognition — and more importantly, character recognition — is vitally important in the streaming space. In 2019, 60% of Netflix’s usage came from kids and family driven entertainment. Netflix has partnered with DreamWorks Animation, Sony, and even ViacomCBS to ensure kids can find their old and new favorite shows on the streaming service. Paramount+ and Disney+ don’t have to try to convince kids (and their credit card wielding parents) that they’re home to favorite movies and TV shows. They just have to keep producing.

For every new High School Musical series or Mighty Ducks show, Nickelodeon is going to have a Paw Patrol movie or new Spongebob Squarepants film. ViacomCBS is launching an entire studio dedicated to producing more content based in the Avatar: The Last Airbender universe.

Kids already know the characters, and having more of what they know might convince them to spend more time on Paramount+ than Disney+. Companies look at a few key streaming metrics: what leads to people signing up (growth), what are people watching (engagement/usage), and what’s preventing them from canceling (retention). Kids content, if done properly, helps accomplish all three.

“Clearly, ‘kids’ is working for us,” Bakish said on a recent earnings call, adding that ViacomCBS is leaning into producing more Nickelodeon originals for Paramount+. “We’re really excited about getting to have something on the platform every week that's fresh for someone to watch.”

We Can’t Cancel

The key to pulling ahead in the colloquial streaming wars is finding a way to be a necessity instead of an option.

There are a few ways to do this: HBO Max is the best place for HBO fans to watch their favorite shows or anticipated new shows, Hulu is the only streaming service to watch new FX series on, and Disney+ is the only streaming service that’s 100% kid friendly. Let’s examine the last one.

If you live in a household with kids, Disney+ is a no brainer. The streaming service is on the cheaper end of the spectrum, it’s guaranteed to carry something they want to watch, and there’s no risk of stumbling upon shows or films they shouldn’t be watching. If parents are into Marvel and Star Wars, well, that’s just an added bonus.

Before Disney+ launched, Disney’s former head of streaming, Kevin Mayer, reiterated that Disney+ was more than just a platform for kids. That’s true, but Disney’s biggest strength is that it’s so synonymous with safety, gold standard entertainment (classic animated films), and characters that kids already know and love. The core to being a successful entertainment company in 2021 is love and being able to monetize that love. No company is better at that than Disney.

On the kids front, one company that comes close is Nickelodeon. In 2018, Spongebob Squarepants was still the most recognizable kids brand in the United States, according to Parrot Analytics. Paw Patrol is rated the most popular kids show in the United States. New upcoming series that play on classic titles, like Rugrats and iCarly, are tapping into decades-plus of recognizable programming that parents and kids might enjoy together.

This, too, is key — 75% of parents polled in a Common Sense Media report in 2018 said they spend multiple hours a week watching television with their kids. New parents may have grown up with Spongebob and iCarly themselves. Paramount+ has enough Nickelodeon catalog to encourage adults to revisit childhood favorites like All That, CatDog, Drake and Josh, Rocket Power, Fairly OddParents, and Hey Arnold while their kids watch their own favorite series.

Nickelodeon, alongside Disney and Cartoon Network, become a part of every new generation. If executed right and brought together on one platform, bookended with a plethora of other content, Disney+, HBO Max, and Paramount+ become obvious ongoing subscriptions instead of possibilities.

This Is Just the Start

The fight for kids’ attention in the streaming space feels like it’s only just beginning. WarnerMedia is rebranding its Cartoon Network division to make it the company’s family brand, and ordering way more series. Apple is beginning to tap into the kids market, and Netflix is trying to release six animated films a year — more than Disney Animation Studios and Pixar combined. Plus, Netflix has a litany of kids shows, and partnerships with crucial studios like Moonbug (makers of Cocomelon, one of the most popular global kids channels on YouTube). Disney will continue to Disney.

ViacomCBS is in a position to become a go-to streamer for kids content. Executives overseeing Paramount+ need to determine how to make it a necessity, not just an option. The answer might not be in a new Halo live-action show or another NCIS; the answer might be found in Bikini Bottom.


Originally published: Thursday, May 06, 2021.

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