Equities

Paramount Eyes Amazon for Streaming, Ad Revenue Up 24%

Paramount in talks with Amazon and Comcast for potential partnerships, eyeing expanded streaming and advertising ventures.

By Athena Xu

5/15, 17:56 EDT
Amazon.com, Inc.
Comcast Corporation
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Key Takeaway

  • Paramount Global is in exploratory talks with Amazon and Comcast for potential partnerships, including bundled sales and a streaming joint venture.
  • Amazon's advertising business grows, marking its first Upfronts participation and introducing ads on Prime Video to compete in the digital ad market.
  • Digital advertising is set to outpace traditional TV spending, with Amazon's ad revenue up 24% to $11.8 billion in Q1, driven by content diversity and live sports.

Paramount Explores Partnerships

Paramount Global is actively seeking ways to enhance its media business footprint, engaging in discussions with Amazon.com Inc. and Comcast Corp. These talks, still in the exploratory phase, could potentially lead to expanded collaborations or new ventures. Paramount, known for its streaming service Paramount+ and a vast library of TV programs, is considering bundled sales of channels and advertising opportunities with Amazon. Additionally, a streaming joint venture with Comcast is on the table. Paramount+ already enjoys popularity on Amazon’s Channels store, and Paramount is a significant content provider to Amazon’s Prime Video service.

Amazon's Upfronts Debut

Amazon's advertising business, already a formidable force in the digital realm, is making strides into traditional media. This year marked Amazon's inaugural participation in the Upfronts, an event traditionally dominated by media giants like Disney and Comcast’s NBCUniversal. Amazon's move to introduce ads on its Prime Video streaming service signifies a major shift, positioning it as a leader in ad-supported premium streaming. With digital advertising expected to grow significantly, Amazon leverages its Prime Video, Freevee, and Twitch platforms to attract a larger share of ad dollars away from traditional TV.

Advertising Industry Shift

The advertising landscape is undergoing a transformation, with digital advertising outpacing traditional TV. Projections indicate a modest increase in traditional TV ad spending, while digital advertising is set to surge. Amazon's decision to incorporate ads into Prime Video and its success in attracting viewers to its ad-supported platforms like Freevee and Twitch highlight the shifting dynamics. The company's ad business growth, up 24% to $11.8 billion in the first quarter, is driven by its diverse content offerings and strategic investments in live sports programming.

Amazon's Ad Business Evolution

Amazon's advertising strategy has evolved significantly over the years, from its initial foray into website ads to the incorporation of digital video ads on Prime Video. The company's recent Upfronts presentation showcased its commitment to expanding its advertising reach, featuring a packed programming slate and endorsements from celebrities. Amazon's ad-supported streaming content now reaches 175 million U.S. viewers monthly, with Prime Video boasting 200 million global customers. The company's continuous innovation in advertising is underscored by its substantial revenue growth in the ad sector.