Co-Chief Executive Officer, Paramount Global

The streaming wars winner will not be the one that spends the most, says Chris McCarthy

🎥 Dec 20, 2022 📺 CNBC Television ⏱ 3m 👁 2038 views

Chris McCarthy, Paramount Media Networks and MTV Entertainment Studios president and CEO, joins CNBC's 'Squawk Box' to ...

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About Christopher Mccarthy

Christopher McCarthy, co-chief executive officer of Paramount Global, said on the company’s Q4 2024 earnings call that the company added 5.6 million new subscribers in the quarter, the strongest quarter in two years, and 10 million for the full year. He stated that global watch time per user improved 20% in Q4 and that churn improved by over 100 basis points year-over-year. McCarthy noted that total company adjusted operating income returned to growth, up 30% year-over-year to $3.1 billion, and that free cash flow reached $489 million, the highest in four years. He said the company is “making the successful transformation into a streaming‑first company” and expressed confidence that Paramount Plus will achieve domestic profitability in 2025. In earlier interviews, McCarthy described the company’s strategy as focused on creating “mass commercial hits” and franchising its intellectual property to fuel Paramount Plus growth. He said the winner of the streaming wars “is not going to be the one that spends the most money but the one that makes the mass commercial hits” and that the company is “laser focused on making the big hits and turning them into franchises.” He also noted that Paramount Global was leveraging its linear television base, where “over 70% of all TV minutes are spent on linear,” to launch new series and accelerate its streaming service.

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Transcript (11 segments)

Host0:01

Beyond Anyone Show.

Something just happened where... don't tell me. I'm not, and a couple scenes in Yellowstone, and it's so violent, but something just happened and my eyes were like, whoa. And seeing Stallone do it was cool, too, at 70 something years old, or Sam Elliott at basically 80 riding around on a horse is cool.

These actors and actresses are at the prime of their game. Tulsa is a great way to appeal to everybody and bringing more and more signups and getting people like yourself to talk about those series. We really build out the buzz. It's why we are having such tremendous success.

We need to talk about business, and I get infatuated. Tim McGraw, who knew he would be such a big actor. I didn't want to see that last episode, and I don't want to see that ending.

Made you think of Blake, right?

Just knowing something is going to happen. If it just happened quickly, it would be okay, but knowing that I was going to watch it happen, I didn't want to see it. Who is going to win, Chris, in streaming and how many will be left at that point? Cord cutting, there's no point to cord cut anymore. You are doing the same thing with streaming. I am getting out. At least it's all in one bundle with your cord. Streaming, I got way too many things.

Christopher Mccarthy1:43

The winner of the war is not going to be the one that spends the most money but the one that makes the mass commercial hits. When doing that, you are making an eye towards profitability quicker and more efficiently. That's why we are laser focused on making the big hits and turning them into franchises to fuel the future of Paramount Plus, and the winners will have the hits and from where we sit, we will feel pretty great about that.

Host2:13

Can you tell if we are going into a recession or not? Is this totally elastic, streaming? I would think it is.

Christopher Mccarthy2:21

Consumers are always about following the biggest hits and going with the most buzz, regardless of where the environment is and economy, and big hits break out from the pack and that's why we are doing so well. Every month this past year we were, almost every month, we were the number one most downloaded streaming service. Staying laser focused on the bigger hits is proving wildly successful and we have lots more room to grow.

Host2:51

The only caveat I would give you, I have been through a lot of upfronts, and I remember the way it used to be, and NBC would be, we would have Friends and Seinfeld, and then next year we would be dead last at different times, and you live and die by the sword, and you may have no hits next year. How do you plan for that?

Christopher Mccarthy3:17

Our business has been rooted in the mass commercial business, whether it's in cable or broadcast with CBS, and across the last 20 years, nobody has been number one in more demos and more genres than CBS or Entertainment Studios, and that's why we are having success, because we are appealing to the center of the country and the coast and around the world, and that's why the franchise strategy will continue to deliver, and we are taking the big hits and making them.