ViacomCBS is considering a plan to rebrand its streaming services as Paramount+, as Shari Redstone tries to revive her family's media empire with a more open mind to a potential sale.
The death of Ms Redstone's father, Sumner Redstone, this week has raised fresh speculation about the fate of the company, which was once among the most powerful in Hollywood, with cable channels such as MTV and the Paramount film studio, home to Top Gun and Star Trek, as well as the broadcast network CBS.
The company's streaming service has emerged as central to the revival strategy and Bob Bakish, ViacomCBS chief executive, recently began expanding the CBS All Access streaming app to include programming from Viacom and Paramount – something that became possible after the merger of the two Redstone-controlled businesses, CBS and Viacom, last year.
The aim is to create one "super-service" to compete with the likes of Disney+ and Netflix.
Rebranding
The company plans to rename this service, in part because management believes the CBS brand appeals mainly to an older audience, said people familiar with the matter. Paramount+ is the top of a shortlist for the new brand and no final decision has been made, these people added.
A ViacomCBS spokesperson said: “We are currently going through a thoughtful branding process that will reflect the expansion and relaunch of the service. Both existing and new original brands are under consideration.”
ViacomCBS this month reported it had reached 16 million streaming subscribers across its services, growing more quickly than it had predicted. Goldman Sachs analysts said the results should “boost investors’ confidence in the company’s [streaming] strategy”, while arguing that the market is “assigning immaterial value” to ViacomCBS’s streaming business.
Disney+ had 60.5 million subscribers as of early August, while Netflix had 193 million subscribers at the end of June.
Mr Redstone had been adamantly against selling his treasured businesses but the rest of the Redstone family, including Shari, are more “logical” and focused on maximising shareholder value, said people familiar with the situation.
The Redstones, as well as ViacomCBS’s management and board, believe their assets are undervalued after a dive in the share price, which would make an imminent sale of all or part of the company unlikely, these people cautioned.
The company has come close to raising cash by selling all or some of the sprawling Paramount studio lot in Los Angeles, said three people familiar with the matter. It expected potential buyers would include developers or possibly Netflix, these people added.
The company eventually decided against the sale after finding cost savings elsewhere.
Ms Redstone took charge of Viacom and CBS as her father's health declined in recent years, reuniting the companies last summer with the aim of giving them more heft to compete with much larger rivals such as Disney and AT&T.
Since the deal was announced last August, the 40 per cent decline in the value of the shares has wiped more than $1 billion from Ms Redstone’s fortune.
Shares in ViacomCBS, in which Redstone family entities hold about a 10 per cent economic stake, have recovered from a coronavirus low of $11.97 to about $27, as the company exceeded forecasts for free cash flow and struck distribution deals for its content with Comcast, Verizon and YouTube. – Copyright The Financial Times Limited 2020
