Paramount Shifts Focus to Streaming in Major Overhaul, While Disney Doubles Down on Theatrical Releases
Paramount Pictures is undergoing a significant transformation, signaling a strategic shift within the entertainment industry as traditional studios grapple with the rise of streaming. James Gianopulos, the studio’s top executive, was ousted on Monday as part of a sweeping reorganization designed to funnel more resources into creating original content for Paramount+, the company’s streaming service. This move represents a major commitment to the streaming platform and a potential scaling back of Paramount’s presence in the traditional theatrical film market.
ViacomCBS, the parent company of Paramount, launched Paramount+ in March 2021, repurposing and expanding its former streaming service, CBS All Access. With the restructuring, ViacomCBS has introduced a brand-new management team and operational structure, explicitly aimed at enhancing the studio’s ability to generate content for Paramount+ and its other streaming platforms. The company aims to shift its focus away from producing numerous big theatrical releases, emphasizing the importance of catering to the growing demand for streaming entertainment.
Bob Bakish, the chief executive of ViacomCBS, emphasized the strategic nature of these changes in a statement. "The moves we’re making today will build on Paramount’s strong momentum, ensuring it continues to engage audiences at scale while embracing viewers’ evolving tastes and habits," he said. This statement underscores the company’s belief that the future of entertainment lies in delivering content directly to consumers through streaming platforms, adapting to their changing preferences and viewing behaviors.
Brian Robbins, previously in charge of the company’s children’s television division, will take over from Gianopulos as chief executive of Paramount Pictures. This appointment signals a potential shift in the type of content Paramount produces, with Robbins’ background in children’s programming potentially influencing the studio’s future output. His leadership is expected to guide Paramount in navigating the evolving media landscape and solidifying its position in the competitive streaming market.
The restructuring will likely result in a significant reduction in the number of theatrical releases Paramount undertakes each year. According to an insider familiar with Viacom’s strategy, the studio is expected to cut its theatrical releases by approximately half. In the past, Paramount typically aimed for about a dozen theatrical releases annually. This reduction reflects a deliberate reallocation of resources towards streaming production, signifying a move away from the traditional blockbuster model that has defined Hollywood for decades.
Paramount Television Studios is also set to play a crucial role in this strategic shift. The division will increase its focus on creating content specifically for Paramount+, prioritizing original shows exclusive to the platform. This strategy marks a change from the past, where Paramount Television Studios often funneled content to external streaming services like Netflix and Apple TV+. By creating exclusive content, Paramount aims to attract and retain subscribers, establishing a strong identity and competitive advantage in the streaming landscape.
The decision by Paramount to prioritize streaming comes at a time when other studios are adopting different approaches. Interestingly, just days before the announcement of Paramount’s reorganization, Disney revealed its plans to increase its focus on theatrical releases for the remainder of 2021. This decision contrasts sharply with Paramount’s strategy, highlighting the diverse approaches being taken by major studios in response to the evolving entertainment landscape.
Disney’s move to prioritize theatrical releases follows a period of heavy reliance on "day and date" releases, where highly anticipated films premiered simultaneously in theaters and on Disney+. While this strategy allowed Disney to cater to audiences who were hesitant to return to cinemas due to the pandemic, it also potentially cannibalized theatrical revenues and raised questions about the long-term viability of the traditional theatrical model.
Kareem Daniel, chairman of Disney Media & Entertainment Distribution, explained the rationale behind the shift back to theatrical releases. “Following the tremendous box office success of our summer films which included five of the top eight domestic releases of the year, we are excited to update our theatrical plans for the remainder of 2021,” he said. Daniel also noted that improving consumer confidence in moviegoing played a key role in the decision. "As confidence in moviegoing continues to improve, we look forward to entertaining audiences in theaters.”
The contrasting strategies of Paramount and Disney illustrate the uncertainty and experimentation currently taking place in the entertainment industry. While Paramount is betting on the continued growth of streaming and the creation of exclusive content to attract subscribers, Disney is banking on the enduring appeal of the theatrical experience and the drawing power of its blockbuster franchises. Both companies are navigating a complex and rapidly changing landscape, and the success of their respective strategies will ultimately determine the future of film distribution and consumption.
The shift at Paramount also underscores the broader trend of media companies investing heavily in their own streaming platforms to compete with established players like Netflix and Amazon Prime Video. The "streaming wars" are intensifying, with companies vying for subscribers by offering a diverse range of original content, exclusive movies, and live events. This competition is benefiting consumers, who now have access to a wider array of entertainment options than ever before.
However, the shift to streaming also poses challenges for traditional movie theaters, which have already been struggling with declining attendance in recent years. If more studios follow Paramount’s lead and prioritize streaming releases, theaters could face further challenges in attracting audiences and maintaining their relevance in the entertainment ecosystem. The long-term impact of the streaming revolution on the theatrical experience remains to be seen.
In conclusion, the strategic overhaul at Paramount Pictures represents a significant moment in the evolution of the entertainment industry. The decision to prioritize streaming and reduce theatrical releases reflects a belief in the enduring power of online distribution and the changing viewing habits of consumers. While Disney is doubling down on the theatrical experience, Paramount is betting on the future of streaming, setting the stage for a fascinating battle for dominance in the entertainment landscape. The coming years will reveal which strategy ultimately proves to be the most successful in navigating the ever-changing world of media consumption. The ousting of Gianopulos marks not just a change in leadership, but a fundamental shift in Paramount’s vision for its future.
