Wall Street apparently believes in the turnaround plan Viacom CEO Bob Bakish unveiled Thursday morning alongside its earnings report, pushing the company’s stock up 4 percent on the day. But a good part of that plan’s success will hinge on the media conglomerate’s erstwhile crown jewel Paramount Pictures, which is hoping to juice up its box office by tapping into Viacom brands like Nickelodeon, Comedy Central and MTV.
Paramount is in the middle of a terrific awards season, in which the studio’s films, led by “Arrival” and “Fences,” reeled in 17 Oscar nominations — second only to “La La Land’s” Lionsgate.
And while the studio’s fourth quarter performance was much improved over last year, with the filmed entertainment division up 24 percent year-over-year and theatrical revenue up 104 percent, Paramount still finished 2016 in last place of the six major studios by market share for the fifth consecutive year.
One area Bakish explicitly plans to focus on are niche movie markets that tap into the fan bases of its core channels, starting with Nickelodeon-branded family fare. That looks like a savvy move coming off a year when “Zootopia,” “Moana” and “The Jungle Book” helped make Disney the first studio to top $7 billion at the global box office — record-breaking grosses that also benefitted from marketing synergy with Disney-owned networks at ABC Television Group.
“Paramount’s film slate will now include co-branded releases from each of the flagships (BET, Comedy Central, MTV, Nickelodeon, Nick Jr.), along with Paramount branded films focused on franchises, tentpoles and other projects,” the company announced in a statement detailing its turnaround plan. “In an initial step, the company today is announcing a commitment between Nickelodeon and Paramount to move forward on a slate of four films. The first of these films, ‘Amusement Park,’ will premiere in theaters in summer 2018 and will launch a TV series on Nickelodeon the following year.”
In a CNBC interview after Viacom’s earnings call, Bakish made that strategy clear, touting Nickelodeon and Nick Jr.’s strong ratings with TV’s youngest viewers. He also spoke about “taking advantage of some of the pay brands we have in the house, which have audiences 365 days a year, have global awareness from a brand perspective [and] have a pipeline in franchises and talent.”
Leveraging brands popular with kids and nostalgic adults has been a blueprint for success for several franchises, notably Warner Bros.’ Lego Movie series, whose “Lego Batman” looks likely to top the box office this weekend.
But tastes change fast with young audiences: Paramount’s 2014 “Teenage Mutant Ninja Turtles” reboot hauled in $493 million worldwide on an estimated $125 million budget, though, last year’s sequel, “Teenage Mutant Ninja Turtles: Out of the Shadows,” limped to just $246 million worldwide on a $135 million budget.
Paramount’s “Monster Trucks” also ran into a brick wall, as the film intended to be a tentpole for the studio’s nascent animation division became one of 2017’s biggest flops, as Viacom announced a $115 million write-down related to the film before it was even released. “Monster Trucks” has grossed just $58 million worldwide on an estimated $125 million budget.
Many Hollywood execs have also learned the hard way that not all franchises brands are created equal. Disney can basically print money with its Marvel and “Star Wars” films, as can Warner Bros. with “Harry Potter” and Lego, and certainly Paramount with “Transformers.” But the “Max Steel” film based on the eponymous toy flopped.
Through Viacom, Paramount can loop in brands MTV, which has suffered from declining ratings stateside as its teen demographic has apparently turned elsewhere — and doesn’t really present many obvious movie tie-ins. But that’s why Bakish is starting with Nickelodeon.
The integration plan also represents the hope to take better advantage of the numerous young talents who have emerged on Viacom platforms only to end up making movies with other studios. Comedians Keegan-Michael Key and Jordan Peele raised their profile with five successful seasons of “Key & Peele” on Comedy Central, but the two released a 2016 film, “Keanu,” with Warner Bros. New Line Cinema. Bakish has called Comedy Central star Amy Schumer’s film career with Universal Pictures a “missed opportunity.”
One thing Bakish doesn’t appear to be considering — in a departure from predecessor Philippe Dauman — is a sale of all or part of the studio. China’s Dalian Wanda Group was sniffing around last year when a 49 percent stake was on the table, but that offer apparently left with Dauman.
All Bakish can do to avoid sale talk swirling is ensure the turnaround plan works. And for that, the hundred-plus-year-old studio is counting on some of the world’s youngest moviegoers.