What you need to know:

• Paramount ANZ boss Beverley McGarvey claims the growth rate of its local streaming business is outstripping all others.
• McGarvey wouldn't disclose numbers. Roy Morgan estimates put YoY growth at 348 per cent, with Paramount+ at circa 400,000 subscribers, which if accurate would put annual ballpark subscriber revenue around $43m at current prices.
• McGarvey said while a price rise is not imminent, it is "almost inevitable".
• McGarvey dismissed rumours of Paramount offloading Ten, underlining free-to-air's value in both growing subscriber base and extracting secondary value from content investments that will initially screened to paying subscribers.

Paramount ANZ Executive Vice President and Chief Content Officer Beverley McGarvey has poured cold water on speculation that Ten’s free-to-air business could be offloaded by its US parent.

“We had an investor presentation last Thursday,” she told Mi3. “They talked strongly about the [linear] mix in the ecosystem as being something that really helps drive migration to streaming and they have free-to-air assets in five countries, including CBS. So yes … I think [talk of broadcast assets being sold] is made-up conjecture.”

Acknowledging linear audience declines following a lockdown-induced pump, McGarvey said Paramount plans to wring further value from content acquired for streaming by later pushing it out to audiences and advertisers via BVOD and broadcast.

“It is important that we get utility out of our content, whether that is across one, two or three platforms, especially with Australian narrative content,” said McGarvey. “In order to continue to be able to invest at the level that we want to … we really need to be able to play out on multiple platforms.”

Paywall first, free-to-air later

At the top end, most new content will likely premiere behind the paywall. “We will also have shows that premiere on Ten. We've announced that we're doing Paper Dolls on Ten next year, so it is important to do both,” said McGarvey. The approach taken with housemate drama Five Bedrooms, however, is the more likely.

“It launched on Paramount+ and then twelve months later it had a run on Ten. So if you wanted to see it first, you could pay $9 a month and watch behind the paywall. If you're willing to wait, you can see it with ads a year later – and I think that's important to give our audience that choice,” said McGarvey.

“But it's also important from a commercial point of view to continue to make that investment when, for example, the audiences are shifting. We don't necessarily see 1.2 million people watching a drama on Ten anymore. In order to make that investment, we need to get better utility out of it.”

“Fastest growing SVOD”

The run rate for paying subscribers is “higher than we expected, ahead of forecast,” per McGarvey. Albeit off a low base, she cited internal analysis based on Omdia and competitor reports suggests Paramount+ is Australia’s “fastest growing streaming service” since the rebrand of 10 All Access 12 months ago. Estimates from Roy Morgan back that claim, suggesting Paramount+ made circa 350 per cent subscriber gains to stand at 400,000 households as of 30 June 22.

“We already do SVOD ads”

McGarvey was asked whether plans by Netflix and Disney Plus to launch ad-funded models this year or next in Australia have influenced strategy. She implied Paramount+ got their first.

“No, because … the US already has an ad tier. We [Paramount+in Australia] already have ads – because we have an adload through the football. So we already have a streaming proposition that contemplates advertising within it,” said McGarvey. “If anything [rivals launching ad-funded models] probably reinforces our idea that there is a world in which there is room for multiple ways to operate.”

While the network has long touted the football as an Australian AVOD test-bed, McGarvey said it was “too early” for firm launch discussions. “I'm not sure that we will have [ad-funded SVOD] outside the US yet. But I would say that if we have it in the US, it will at least be a consideration [locally].”

Price rise “inevitable”

Paramount+ has no immediate plans to hike prices, but McGarvey indicated they are coming.

“We came to market with a very efficient price … So I suspect we have some headroom there,” said McGarvey. “We don't have any plans to change the price next month … But will the price go up at some point? Almost inevitably, yes. The question is when and how much.”

Off-network ads, gaming driving growth

While citing terrestrial TVs ability to “drive that migration to streaming” in quashing rumours of a Ten selloff, McGarvey said the local SVOD marketing strategy “is probably heavily majority off platform” as it aims beyond audience cannibalisation.

“We use our own and operated services … but obviously we don't just want our own customers to go to Paramount+,” said McGarvey.

“So we are spending a lot off platform, both above the line and within performance. Especially talking to, for example, younger men, going and finding those young men where they are gaming … as well as building the brand and spending the brand dollars and building the Paramount+ brand,” she added.

“Better early than late on diversity”

Ten last year flagged a major diversity push, outlining plans to ensure its programming better reflects Australian society. At the time, McGarvey brushed off suggestion that the network may risk running ahead of its core market and says that view still holds.

“I don't know if we're ahead of the audience. I wouldn't like to be too far ahead. But you also definitely don't want to be behind,” she said. “It wouldn’t kill us to be slightly ahead.”

Moreover, greater on-screen diversity “actually does lead to better ratings. Having 24 of the same types of people on a reality show is kind of boring,” added McGarvey. “When you have people with different backgrounds, different points of view and a different life experience, you get a better show. When you think of things like Amazing Race or Master Chef or Hunted, people who have a different life experience bring different content to the table, and I think that makes the show better.”

Better late and right on ESG?

At last October’s upfronts, the network signalled an imminent commitment to achieving net zero carbon emissions. Since then, it’s gone quiet, but McGarvey indicated a probable “update by the time we get to our upfront this year.”

“From a global corporate point of view, it’s an important issue,” she said. “And that [global buy-in] matters, because that will give us the investment capability to actually action that ambition.”