Why Paramount+ is a potential game changer

Channel Ten and Paramount+ have the potential to act as a significant disrupter not just to football production in Australia or sports production in general but to the entire streaming sector in this country.

The Paramount+ product that Channel Ten – owned by ViacomCBS – is rolling out to customers in Australia is a business model we haven’t really seen before in this country prior to Nine/Stan Sport and, to a lesser extent, Amazon Prime’s offering – namely, a platform covering a wide spectrum of content including TV shows, movies and live sport, integrated across traditional free-to-air network programming as well as modern online streaming.

Foxtel have had their Foxtel Now streaming platform for a good few years now but do not have access to free-to-air programming and infrastructure, and they also operate much more premium price point than Paramount+ is proposing initially. Channel Ten have the backing of through ownership by a major movie production company in ViacomCBS, owners of Paramount Pictures, and so should eventually obtain exclusive access to a huge library of movies currently offered on Foxtel, Netflix, Stan et cetera.

Foxtel have never really had the option to show content on digital TV for free to customers regularly, which means their model relies on paid subscribers, who they monetise further by advertising to. Channel Ten, however, will be able to offer some of their acquired content free-to-air – A-League on Saturday nights and Socceroos and Matildas matches in Australia but also Masterchef and the Project – and collect revenue for these programs via advertising to a wider audience while also offering some content behind a paywall, such as other A-League matches, FFA Cup matches and a potentially vast movie and TV library.

Their model, along with the model of Channel Nine and Stan, is a modern hybrid free-to-air and streaming that covers both entertainment and live sport. It’s a real potential game changer that could have some existing competitors, particularly Foxtel and Optus Sport, looking over their shoulder.

(Photo by Kelly Defina/Getty Images)

Why do I single out those two services specifically, you ask? Well, in the case of Foxtel, they are the main leader and competitor when it comes to a sport-plus-entertainment platform in Australia, for a long time ubiquitous in this market.

In the case of Optus Sport, it is because Channel Ten are looking to build out a significant football offering – as evidenced by all the international football content announced a couple of days ago – and will therefore be eyeing off the Premier League rights next time they become available. Imagine what would happen to Optus’s subscription base were they to lose the Premier League to Channel Ten; it would collapse almost overnight.

Channel Ten know that the rights to the Premier League plus Champions League are worth $15 per month to customers in Australia based on what Optus have achieved with their offering. So you could potentially forsee Channel Ten obtaining the rights to those and adding a European football add-on package for, say, $11 monthly, to the base $9 per month Paramount+ subscription it is launching with.

That means Paramount could then charge $20 each month for something that includes the A-League, FFA Cup, Socceroos, Matildas, AFC tournaments, English Premier League and UEFA Champions League in addition to a vast supply of entertainment content. It’s a mere $5 more than what Optus charge currently but $5 less than Kayo. It would be significantly cheaper to the Foxtel Now subscription that tends to hover around $50 or $60 a month.

Alternatively, Optus might forsee this scenario and decide that if you can’t beat em, join em. They might thus choose go into partnership with Paramount via an Optus Sports add-on package. In this scenario Paramount+ subscribers would again have the option to add this package for $11 a month. Optus accept a $4 hit to their monthly subscription fees for these customers but would know Channel Ten aren’t going to step in steal the rights off them.

(Photo by Bradley Kanaris/Getty Images)

For consumers, we continue to get access to the tournaments other than the Premier League and Champions League – such as Euros, J-League et cetera – that Channel Ten would be unlikely to bid for, thus the total Optus Sport offering would remain intact. Optus Sport would then still be free to continue to give subscriptions away free to their phone customers as a sales incentive or charge other customers who neither have a phone contract with them nor want Paramount+ in addition to Optus Sports.

It should be noted that Netflix and Foxtel have a similar existing arrangement currently, whereby Netflix software is integrated in the Foxtel infrastructure, and you can even get billed for your Netflix from Foxtel in one bill.

Where Channel Ten securing the rights to the Premier League and/or Champions League becomes a real game changer is again in their business model, namely their hybrid free-to-air/streaming model. It wasn’t that long ago that the Premier League and the Champions League both were shown in part on free-to-air SBS, but it has since morphed into a paywall-only product on Optus Sport.

In Channel Ten securing the rights, you could see them showing the early Saturday night Premier League on their free-to-air channel just after the free-to-air A-League match (as well as it being streamable on Paramount+), with the remaining games behind a paywall.

Likewise with the Champions League, a smattering of games per matchday could be in front of the paywall, the rest behind. This means that these leagues are monetised via advertisements to free-to-air viewers and subscription fees to subscribers, who are then also advertised to, unfortunately.

So I’d be willing to put money on Channel Ten securing the rights to the Premier League the next time it comes up for bidding. Why am I so confident? Because the current sport offering on Paramount+ is nowhere near enough to generate subscriptions in a mainstream way, as much as we all love the A-League. They will need to pick up more content and either factor it in to their base subscription of $9 or create add-on packages similar to what Stan have done with Stan Sport – that is, requiring a basic Stan subscription and then the Stan Sport add-on package to access rugby and tennis.

Paramount+ will need more sport, and we know for a fact that it won’t be the NRL or AFL for at least the next five years. Rugby is locked up by Stan Sport. The Premier League rights, however, work on several levels for Channel Ten. It complements the A-League, whereby on a Saturday night you could potentially schedule a Saturday night football preview and build-up program straight after the national news, live A-League at 7:00pm, an A-League post-game show that doubles as a Premier League pre-game show, and then live Premier League from 9:30pm, with a post-game show at 11:30pm, with the remaining Premier League games then viewable behind a paywall on Paramount+.

Moreover, by adding more football content to what exists, you don’t need to hire whole new commentary teams; you can use the existing one you have hired for both Australian and overseas content as well as using commentators existing in the feed to save production costs. Adding the Premier League and potentially the Champions League also increases total market share of the streaming sector by claiming Optus Sports subscription base but also by genuinely creating a true home for football content in Australia that is cheaper than the combination of separate Paramount+ and Optus Sport subscriptions.

It would also encourage new subscriptions by appealing to those who don’t want to pay for Paramount just for the A-League or pay for Optus Sport just for Premier League but who would pay for a product giving a vast array of all.

Beyond additional football content such as the Premier League, I can also see international cricket and the NFL coming onto Channel Ten and Paramount+ in future years in both free-to-air and paywalled modes. Currently international T20 and one-day international cricket are paywalled, with Channel Seven showing only the Test matches, and you can bet Cricket Australia will want to rectify that in the next TV negotiations. It was a huge mistake from them to hide this content away on Foxtel.

I see Channel Ten showing the men’s and women’s international matches in all formats totally free-to-air with no paywalled content and then two or three Big Bash League matches free-to-air each week with the rest paywalled on Foxtel.

This would also have an interesting ramification for the A-League being played in summer. If Paramount+ had the rights to both the A-League and cricket, surely their preference would be for a winter A-League competition so as not to compete with the cricket and to have an all-year-round sport offering.

(Photo by Paul Kane/Getty Images)

This then brings us to the NFL, a product that CBS actually produces for themselves in the States. Currently viewers in Australia have access to seven out of 16 live NFL games a week, two shown free-to-air on 7mate and five shown paywalled on Kayo/Foxtel via ESPN. So on the face of it there are another nine games going unshown to Australian viewers that someone like Paramount+ might be interested in.

Being that the games CBS produce are currently on-sold in part to 7mate and ESPN, it seems likely that CBS will simply cancel this arrangement when they can and instead put those games on their platforms as either free-to-air or paywalled. ESPN for their part are likely to pick up games from other broadcasters they lose from CBS to keep up their own offering, and it just might be that between a Paramount+ subscription and a Kayo subscription Australian NFL fans would have access to ten to 16 games each week across the two platforms rather than the mere seven they get now.

The hyper-modern business model of these platforms therefore has huge potential ramifications for the streaming sector in Australia. Unlike Netflix, they are not simply offering movies and TV shows. Unlike Kayo, they are not simply offering live sport. Together with Channel Nine and Stan they represent a modern hybrid sport-entertainment offering that caters to both free-to-air and subscriber markets.

Their user experience represents a kind of back-to-the-future approach to how people watch TV. We can all remember in the days before on-demand streaming flicking aimlessly on free-to-air TV and even satellite Foxtel to find something that took our fancy, which could have been anything from a live sports match, a movie, a TV show, a documentary, a kids cartoon or a news program. Where you landed was a lottery for major networks and who they got to advertise to.

The Paramount+ model potentially creates a one-stop shop for content functioning in a similar way to the old channel surfing, but instead Channel Ten know that whatever content Paramount+ subscribers land on, they are the ones that get to advertise to you 100 per cent of the time – and you are also paying for this privilege via a subscription fee.

To this end it should be noted that Paramount+ in the States currently offers live streams of all their affiliated TV stations – replete with in-broadcast advertising – so you can expect Paramount+ in Australia to similarly include live streams of Channel Ten as well as their sister channels. Therefore Masterchef and other popular shows would be accessible online as well. Paramount+ could convince people desiring that all-round content offering to move away over time from their current subscriptions in Netflix, Stan and Kayo and instead to a more streamlined offering.

Just imagine if Paramount+ can get an app button included in some manufacturers’ smart TVs – mine has Netflix and Amazon Prime buttons included – or at the very least ensure that the app comes standard on all new TVs. Last time I checked, Optus Sport had an app available on my LG smart TV but not on my mate’s Samsung model.

Add to all this the fact that the APL are now in the business of producing their own football content and you may just be looking into the future of the Australian television broadcasting via Channel Ten and Paramount+ and also Channel Nine and Stan.

Could Paramount+ apply for those government grants to show niche or community sports and then broadcast NPL member federation finals series or the NPL national championship potentially? We know they’ll have the platforms to do it, and we know that those matches are being filmed, broadcast and viewed (albeit in small numbers) already. Could Channel Ten or the APL use government grants to subsidise costs in improving the production standard of the existing broadcasts?

And then – voila! – a new professionally produced football package is born that shines a light on second division football in Australia.