Showtime chief’s exit alerts Paramount transferring towards streaming merger

Paramount International government David Nevins, who joined Showtime in 2010 and has run the premium community since 2016, is leaving the corporate on the finish of the yr.

Alongside together with his departure, Paramount International is restructuring Showtime in ways in which may give the corporate flexibility to successfully finish Showtime because it’s existed for many years — as an unbiased premium cable community churning out status hits resembling “Dexter,” “Weeds,” “Billions,” “Homeland” and “Yellowjackets.” 

Paramount International introduced Thursday that it is transferring Showtime’s community enterprise beneath the management of Chris McCarthy, who runs different linear cable networks resembling MTV and Comedy Central, and the streaming service beneath Tom Ryan, who runs Paramount Streaming.

The strikes come as the corporate is contemplating the thought of merging Showtime into Paramount+ and utilizing the community’s hit programming to gasoline Paramount+ subscriptions, in response to folks aware of the matter. The corporate’s purpose is to have Paramount+ be one of many 5 largest international streaming companies, together with Warner Bros. Discovery‘s HBO Max, Amazon‘s Prime Video, Netflix and Disney+, stated the folks, who requested to not be named as a result of the discussions are non-public.

No choices about Showtime’s future have been made, and no modifications are imminent, the folks stated.

“We’re all the time exploring choices to maximise the worth of our content material funding by giving customers entry to nice Paramount content material — together with the long-lasting, groundbreaking and premium content material choices of Showtime — throughout an array of companies and platforms,” a Paramount International spokesperson stated.

“This transformation has additionally given us the chance to extra carefully align our studios, networks and streaming operations as we execute on our imaginative and prescient and technique for the long run,” Chief Government Officer Bob Bakish stated within the assertion.

Paramount+ has 43.3 million international subscribers and expects to hit 100 million by 2024. The corporate hasn’t detailed its variety of Showtime subscribers however final reported about 64 million subscribers throughout all of its streaming companies — Paramount+, Showtime, Noggin, BET+ and another smaller merchandise. Bakish additionally stated earlier this yr that Showtime misplaced 500,000 subscribers within the first quarter as thousands and thousands of individuals cancel linear pay TV every year.

Paramount International introduced a bundled promotion in August, permitting Paramount+ subscribers to observe Showtime’s content material throughout the Paramount+ app for $7.99 monthly with promoting or $12.99 monthly with out commercials. That provide was step one towards probably making Showtime a tile inside Paramount+, totally merging the 2 companies, the folks stated.

One impediment to pushing Showtime along with Paramount+ is present pay TV distributor agreements. The Wall Road Journal reported final month that Paramount has mentioned merely shuttering the standalone Showtime community with at the very least one pay-TV associate.

One other concept into account by Paramount International executives is to maneuver Paramount+ originals and flicks to Showtime, successfully making Showtime a mirror to Paramount+’s content material that does not seem on different TV networks, two of the folks stated. That might assuage pay-TV suppliers, who may alter pricing towards the merged streaming product.

Showtime’s potential evolution into Paramount+ displays a bigger pattern in media and leisure. HBO, Starz, Showtime and Epix — premium cable networks which have lengthy existed as add-ons to primary cable — do not have the dimensions to outlive towards the largest streaming companies. Consequently, they’re in search of methods so as to add content material and broaden their audiences. HBO content material is featured on HBO Max, which is able to merge with Discovery+ subsequent yr. Starz is trying to separate from Lionsgate so it could actually probably merge with different content material suppliers to achieve scale.

Eliminating Showtime as an unbiased entity would additionally include price financial savings from head rely reductions, resembling Nevins’ departure, and know-how and advertising and marketing duplications.

WATCH: CNBC’s full interview with Paramount International CEO Bob Bakish