Video-streaming and media firm Paramount Global (NASDAQ:PARA) has floated the idea of putting up the shutters on its streaming platform, Showtime, and moving all its content to the company’s flagship platform, Paramount+.
Sources familiar with the matter revealed these developments to the Wall Street Journal. However, they also said that the discussions are still in the nascent stage.
How Will Paramount Benefit?
There can be many reasons behind this consideration. For one, increasing competition from established giants like Amazon’s (NASDAQ:AMZN) Prime and Netflix (NASDAQ:NFLX) is a big threat to smaller streaming services like Showtime. However, some shows on Showtime, like Yellowjackets and Billions have quite a reach. Therefore, bringing the shows under one umbrella will help viewers access these shows by opting for only one service — Paramount+.
Shifting these programs from Showtime to Paramount+ will also help bring more traffic to the Paramount+ platform. Further, the move will help Paramount streamline its business, as maintaining two video services platforms needs additional technology costs and overhead expenses. These can be avoided by integrating the smaller platform into the better-performing one.
Notably, in the June quarter, subscribers on Paramount+ increased 3.7 million globally, whereas Paramount Global’s other streaming services, including Showtime, BET+, and kids’ streaming app Noggin, lost 2.4 million subscribers.
Is Paramount a Good Stock to Buy?
Turning to Wall Street, PARA stock carries a Hold consensus rating based on six Buys, five Holds, and eight Sells. Paramount’s average price target of $26.78 implies upside potential of 19%.
Final Thoughts
The integration of Showtime into Paramount+ gives Paramount an opportunity to improve its bottom line. From this perspective, the move can be a good share price booster.
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