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Can 'South Park' Boost Paramount+ Long-Term?

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Paramount+

Can ‘South Park’ Boost Paramount+ Long-Term?

ViacomCBS streaming service hopes the kids from Colorado can continue its momentum

Don’t look now, but Paramount+ may finally have some momentum. Coming off a few strong weeks thanks to its very own series from “Yellowstone” creator Taylor Sheridan and a certain giant red canine, the ViacomCBS streaming service finally gets a “South Park” to call its own — just two years after the media giant offloaded the streaming rights to the first 26 seasons of the show to rival HBO Max.

On Thanksgiving, “South Park” debuts the first 14 specials (don’t call them movies) as part of its massive new $900 million deal with series creators and showrunners Matt Stone and Trey Parker. Thanks to a complicated set of licensing deals, this will mark the first time that “South Park,” which airs on ViacomCBS sister cable network Comedy Central, will debut something exclusively for Paramount+.

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“We’re very excited to have the opportunity to extend the franchise to ‘South Park’ fans, and to be the home of these exclusive events on Paramount+,” Tanya Giles, chief programming officer of ViacomCBS streaming, said. “Bringing that fandom over to Paramount+ will be very exciting for us.”

Like most other streaming services, Paramount+ is counting on franchise IP to lure consumers. It started with “SpongeBob SquarePants” and a revival of the classic Nickelodeon cartoon “Rugrats” and will soon include a series based on “The Godfather” and a “Yellowstone” prequel series from Sheridan.

The key for “South Park,” which has run for 24 seasons and doesn’t appear to be stopping anytime soon, is to change up the formula. For starters, “South Park: Post Covid” will take place some 30-40 years into the future and feature adult versions of Stan, Cartman, Kyle and Kenny.

“We’re excited to see where these characters land. I have told them, I’m most excited to see what’s happened to Butters,” Giles said. “We wanted to give them the opportunity to take these characters, to take this story, to take this franchise in different directions and new and exciting ways. And the ability to do that at Paramount+ in a made-for-streaming movie format was just a different opportunity for them that they hadn’t considered, but they jumped in and they brought us the idea of having these longer stories to tell.”

Following “Post-Covid,” a second special will debut in December. Giles said the plan is for two a year, though the exact schedule will be dependent on how busy Stone and Parker are. After the December special, they will finally get to work on the long-awaited 25th season on Comedy Central.

“Our goal is to do these events twice a year,” she said. “They still have the 25th season of ‘South Park’ coming up for Comedy Central. So their focus will switch to that after these events, and then we’ll take it from there.”

Those episodes that air on Comedy Central will not be available for Paramount+, thanks to an earlier $500 million-plus deal with WarnerMedia that gives the rival streaming service HBO Max the next-day rights to new episodes — as well as streaming rights to the first 26 seasons of the show (including the next few seasons). When that deal runs out sometime in 2026, those “South Park” reruns will likely move over to Paramount+ (though Parker and Stone have a much larger say in the licensing of their show than most creators).

After very slow growth in 2020, ViacomCBS has more than doubled its streaming customer base in the first nine months of 2021, thanks in no small part to the increased investment and renaming of CBS All Access into Paramount+ earlier this year. Even though CBS All Access was among the first streaming services when it debuted in 2014, ViacomCBS has made a few key missteps since Viacom and CBS were brought back together at the end of 2019.

For starters, the company seemed to change its mind a few times about what exactly it wanted to do in streaming, pivoting from having multiple smaller services, to being more of a “content arms dealer” — Paramount sold off its “Coming to America” sequel to Amazon in the middle of the pandemic, while Viacom also cut an output deal with Nickelodeon that includes a live-action “Avatar: The Last Airbender” series — to its current strategy. That includes not only beefing up Paramount+ and two smaller services, Showtime and BET+, but also the free Pluto TV.

Across all of its streaming services ViacomCBS has nearly 47 million subscribers. That compares favorably to competitors like Hulu and HBO (which similarly rolls up HBO and HBO Max together), and much more favorably to a streamer-come-lately like NBCUniversal’s Peacock. But it still is far behind the likes of Netflix, Disney+ or even Amazon Prime.

Last week, Paramount+ said it had its best-ever week in terms of sign-ups, with 1 million new subscribers (though we still don’t know what Paramount+’s overall subscriber count is), thanks to the debut of Taylor Sheridan’s “Mayor of Kingstown” and Paramount movie “Clifford the Big Red Dog,” which was just greenlit for a sequel largely due to its performance on the streaming service though the animated film has grossed nearly $35 million in theaters in a dual release.

However, some analysts still question the long-term prospects for Paramount+. “I’m not sure that Paramount’s content is good enough to compete as a standalone,” Wedbush analyst Michael Pachter said.

MoffettNathanson analyst Michael Nathanson had its own concerns about the company. “Is streaming a good business? We have long raised this as a key question when it comes to analyzing SVOD services. Over the past year, most media companies have benefited from an assumption that the answer is yes, as long as they can reach scale and beat quarterly subscriber forecasts. For the most part, the singular and simple focus has been on revenues,” Nathanson wrote in a recent research report.

“However, we think we are at the cusp of an inflection in investor thinking on this subject as the market appears to now be considering the bottom-line cost of making this pivot. Streaming isn’t a game for the financially strapped and faint of heart. Nowhere is this debate more apparent today than at ViacomCBS.”