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ViacomCBS (VIAC) to Rebrand CBS All Access as Paramount+

ViacomCBS VIAC announced plans to relaunch its flagship streaming service early next year. The company will leverage the combined portfolio of content created by last year’s merger of Viacom and CBS.

Now known as CBS All Access, the subscription-based streaming service will be rebranded Paramount+, after ViacomCBS’s Paramount movie studio. ViacomCBS will rebrand its existing CBS All Access product in Canada in 2021.

Paramount+ will feature programs from the ViacomCBS portfolio, spanning broadcast television, news, sports and entertainment brands. The company will also bring Paramount+ to international markets with an initial debut in Australia, Latin America and the Nordics in 2021.

The company’s Australian streamer, 10 All Access, which is tied to its linear channel Network Ten, will also be rebranded as Paramount+ and will air exclusive rights to Showtime and CBS All Access original series as well as Paramount+ originals and shows from CBS Television Studios, Paramount Television Studios, BET, Nickelodeon and MTV.

Expanding Content Library from CBS: A Key Catalyst

The new service will add shows from BET, Comedy Central, MTV, Nickelodeon, other Paramount Pictures and ViacomCBS brands in addition to a range of original shows like The Good Fight and Picard that CBS All Access already offers.

CBS All Access will relaunch with a slate of original shows exclusive to Paramount+, including Lioness, a spy drama from Yellowstone creator Taylor Sheridan, a revival of BET’s comedy-drama The Game, a crime series based on true stories called The Real Criminal Minds and The Offer, a scripted series about the making of the mafia saga The Godfather.

Internationally, Paramount+ will be the exclusive home of Showtimes premieres like First Ladies (in which Viola Davis plays Michelle Obama), Halo and American Rust as well as CBS All Access originals including Guilty Party and The Harper House.

Growth Prospects Amid Streaming War

Solid growth prospects of the streaming market which is expected to reach $184.2 billion by 2027, per Grand View Research, have attracted prominent tech and media companies like Apple, AT&T and Disney to the space. This has intensified competition for the likes of Netflix NFLX, Amazon and Roku.

This year, Comcast’s CMCSA NBCUniversal launched Peacock, which has a free ad-supported tier. Peacock has already reached a licensing deal with ViacomCBS to carry select CBS and Showtime series along with Paramount films. Meanwhile, AT&T’s WarnerMedia debuted its $15 a month HBO Max service.

The launch of Paramount+ is the perfect opportunity for ViacomCBS to attract new users leveraging upon the expanded content library. Markedly, Showtime, the sister streaming service to CBS All Access, will continue to operate separately from Paramount+. Together, the two services had 16.2 million subscribers as of the end of June.

Moreover, the Zacks Rank #3 (Hold) company also has a thriving free streaming service in Pluto TV, which has more than 26.5 million subscribers in the U.S. and several global territories. ViacomCBS is looking to use the free ad-supported service to attract advertisers and provide target-based ads thereby expanding its advertising revenues. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here

Per an IHS Markit report, new advertising video-on-demand (AVOD) rollouts and improved ad-tech are expected to augment U.S. online video advertising revenues to $27 billion in 2023, at a CAGR of 11% between 2018 and 2023.

This projection indicates sturdy growth prospects not only for ViacomCBS but also for the likes of Comcast and Fox Corporation FOXA owing to their acquisitions of Xumo and Tubi, respectively.

Fox bought Tubi for $440 million in March among other deals to attract users to ad-supported and free streaming platform against subscription-based streaming giants.

In December 2019, Comcast bought Xumo that pulls streams from partners like ABC News, Fox Sports and USA Today and comes pre-installed on smart televisions. Xumo has around 10 million monthly active users (MAUs), up from 5.5 million MAUs reported in the spring of 2019.

Nonetheless, ViacomCBS is yet to disclose pricing details or specify whether it would show ads to Paramount+ subscribers. We believe that a bundled offering for Paramount+ and Showtime is likely to attract more subscribers on the streaming platform. Currently, CBS All Access costs $5.99 a month with ads and $9.99 a month ad-free.

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