Paramount Pictures Chairman and CEO Jim Gianopulos appeared last week at the Bank of America Merrill Lynch 2018 Media, Communications & Entertainment Conference in Los Angeles. In a wide-ranging question-and-answer session, he elaborated on the multiple levers the studio’s new management team has activated to drive Paramount’s renaissance: tightening synergies with Viacom’s media networks, strengthening relationships with popular streaming services, building out Paramount Television, building up the consumer products business, and more deliberately monetizing the studio’s deep library. And it doesn’t hurt that Paramount is churning out great movies.
The excerpts below portray a studio in the midst of an awesome transformation. Listen to the full interview here.
Paramount is in a renaissance
“About the culture, I think people do feel that Paramount is in a renaissance and they are part of it and they feel engaged in that. We’ve also extended deals that were expiring – new five-year exclusive deal with Hasbro, which brought us across the Transformers properties, but also has properties like Dungeons & Dragons and Micronauts and many other very popular properties and IP that they are very deeply engaged in producing. We extended our deal with J.J. Abrams, who is arguably one of the most talented people in the movie business and the television business, and also extended a new deal with David Ellison to provide some of our biggest tent-poles like Mission: Impossible and now Top Gun and others, and as well as Terminator, a franchise that he owns. So, you add to that Jerry Bruckheimer and others, so I feel really confident that the team that we have on the executive side and the team that we have on the creative and production side externally that we have ongoing relationships with Leo DiCaprio, Martin Scorsese and others will enable us to continue putting together a great slate.”
Making movies for someone or for everyone
“And I think you’ve heard me say and it’s now a longstanding tradition even when we had at Fox, which is make it for someone or make it for everyone. And that in itself is a principle that has guided us so that even recently where we had films like A Quiet Place, which was a very modestly budgeted, originally a thriller horror movie that broke out and did $340 million and a little movie like Book Club, which was – had a very distinct audience of older women. We bought it for $10 million and it made $70 million. And then, of course, the movie for everyone, which is Mission: Impossible that has now surpassed all the prior films and continues to head toward $775 million or more million dollars worldwide. So, the current slate, we’re very confident in.”
Uniting across Viacom
“…[Viacom CEO] Bob Bakish and [Non-Executive Vice Chair of the Viacom Board of Directors] Shari [Redstone] have been very focused on uniting those elements of the company across all of Viacom. … So, we have films like Nobody’s Fool, which is a Tiffany Haddish movie that’s in concert with BET. Similarly, a film called What Men Want, which is a play on the original What Women Want, one of our films, which will be done again with, with BET. Dora the Explorer live movie, which we’re doing with Nickelodeon, as well as an animated movie we’re doing with them. So we’re harnessing all the value and potential and capabilities of the Viacom labels to drive – both to define our slate in the branded area and also to promote our big tent-pole films as well. What they did, for example, on Mission: Impossible was a massive global campaign putting all the resources of the Viacom brands, and particularly internationally MTV, which is very well-situated, as is all of Viacom and there are 3.8 billion homes.”
Tapping the enormous potential of a century-old film library
“… one of the core assets of the studio is its library. And one of the core objectives of the studio is to monetize that library very effectively, and we’re very focused on that. We brought over Dan Cohen with a long history in television distribution from Disney, a very successful executive and a very capable one. We gave him a big challenge last year above his budgeted amount, and he met it and we’re talking about approaching $100 million. So, monetizing the library in the past, Paramount had licensed out some of its titles, in one case to another studio. That made no sense to us. We have the capability and, more importantly, the focus to drive our library to the highest levels. We’re now looking at roughly $1 billion in library revenues, which is up 25 percent over just the past few years, driven in part by some of the new entrants and buyers in the marketplace.”
SVOD Giants – “We look at them as partners”
“[Streaming platforms such as Netflix and Amazon are] competitors for people’s time, I mean, we understand that. But they’ve always been competitors for people’s time. … Our television division is producing shows for all the major platforms as well as several – many of the cable platforms as well – cable networks as well. And they’re hungry buyers for our content, and they have been for years. And every time they open a new territory, there’s a new opportunity there to fill out their availabilities and their content. So, those platforms are spending collectively $21.5 billion a year right now. And so, what percentage of that should we target? I mean, even a very small percentage of it is a big number. So, we look at them as partners in the case where, as you mentioned, where we sold them God Particle and Annihilation, which were films that we had produced, but which when we looked at it, we’re challenged because of the budget that they were made at just a historical relic. But the budget they were made at and what it would have cost to market our way into it versus taking an immediate profit and doing it in a – God Particle, we did in the context of the Super Bowl, which was an event for Netflix, an event ties that for us and allowed them to raise the profile of their service in the context of buying one movie. So, it was a win-win all around and we were in profit the next day.”
Paramount Television aims for huge growth behind new leader
“The goal is $1 billion [in third-party original content production] across all of Viacom, but our target next year is a 50 percent growth in revenue and a doubling of operating income. So we’re going from nine shows this year on air to 14 next year to 20 in 2020 if not more. … Just this week we announced a truly first-class executive television production executive, Nicole Clemens, who is coming over from Anonymous [Content], which was one of our big suppliers, one of the most prolific television production and film production companies in the industry.”
Monetizing owned properties by identifying new revenue streams
“Well, again, some of it speaks to this core strategic initiative that Bob, Bakish and Shari Redstone have put in place, which is to integrate all the resources of Viacom and certainly with us at the studio. … Pam Kaufman, who was running consumer products at Nickelodeon has now integrated all the consumer products for the Viacom entities under one roof. And the market reach that she has, the team that she has in place, the resources that she has and the leverage that she has in that marketplace will certainly enhance our consumer products, and that also goes back to – that also speaks to when we make a Dora the Explorer, we make a SpongeBob, how we are able to monetize those properties. And then, stage plays, I mean, we were really proud, the Tony Award nominations, we had 18 nominations for Mean Girls and SpongeBob, which were properties that we developed and eventually developed into Broadway musicals very successfully. So I think we’ll continue doing that. We’re engaged in licensing of hotels and theme parks all over the world, particularly in Asia, in China, in the Middle East and in Latin America as well as in Europe both in terms of themed parks that are Paramount Parks as well as attractions based on individual property. So that’s another area that is one of the ways that you monetize the properties that you own and hopefully find new revenue streams in the process.”