Entertainment giant Paramount Skydance (PSKY) has a plan for winning more viewers in its streaming services, which have been kind of lagging the rest of the market. By some measures, Paramount+ is actually eighth on some top 10 lists, which means a lot of competitors—including Warner Bros. Discovery (WBD) and its HBO MAX line—are quite a bit ahead. But Paramount has a plan, and it is simple enough to work: more shows backed up by better technology. Investors were clearly on board, and sent Paramount shares surging nearly 5.5% in the closing minutes of Wednesday’s trading.
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Paramount+ is not exactly lacking in content. There are hundreds of shows currently available on Paramount+, and if the Warner deal goes through that number will simply explode to the upside. But Paramount already has plans for a panoply of new shows, with several Taylor Sheridan shows set to emerge including a third season of The Madison and upcoming release Frisco King.
But Paramount is also putting an emphasis on Pluto TV, Paramount’s free ad-supported streaming television (FAST) arm. Pluto had 90 million monthly active users, and with ad support involved, that is no small number. Paramount is out to pick up more catalog titles for Pluto, stuffing the service with more reruns that draw comfort TV watchers. The technological developments, meanwhile, will hopefully get more fleshed out later on.
Books. Yes, Books.
Meanwhile, Paramount is also poised to branch out into a potentially fertile field, and has started its own book publishing imprint. Paramount Global Publishing is being seen as a means to build on “…how fans engage with the company’s revered content while also creating new opportunities to develop original IP.”
The hope is that, once people find a book series they love, Paramount will be able to step in with movie deals, series offers, or potentially both. The problem with that notion, however, is that reading for pleasure has somewhat declined in recent years. The University of Florida and University College London found that daily reading for pleasure in the United States is down about 40% over the last 20 years. This ground, therefore, may not be as fertile as Paramount likely hopes.
Is Paramount Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Moderate Sell consensus rating on PSKY stock based on five Holds and five Sells assigned in the past three months, as indicated by the graphic below. After a 3.45% rally in its share price over the past year, the average PSKY price target of $11.38 per share implies 2.36% downside risk.
