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Paramount is in trouble: The one-time media giant's ad sales are plummeting, and so is its stock price. Would-be buyers are kicking the tires, but no one seems in a hurry to make a deal — the price will surely keep going down. This week, the day after the company broadcast the Super Bowl to a record-setting number of viewers, it announced companywide layoffs.
But why should you, a person who doesn't work at Paramount, care about the future of the company?
Because, as Lucas Shaw explains in a new Bloomberg Businessweek story, it's a proxy for traditional media in general:
The company's troubles are also a warning sign for Hollywood, which looked to avoid the fate of newspapers, magazines and music—industries ravaged by the internet. But as media companies struggle to transition from cable to streaming, they're surrendering the next generation of TV viewers to short-form video apps and services that tech giants in Silicon Valley and China own. So far, Hollywood has relied on restructuring and layoffs rather than innovation and growth, leading to questions about whether we're in the last great age of TV.
As Shaw notes in his piece, Paramount's problems are both particularly acute and self-inflicted: Compared to the likes of Disney and Warner Bros Discovery, it has less room for error because it is less diversified. And under the leadership of longtime owner Sumner Redstone, the company stubbornly refused to accept the fact that its young audience was particularly likely to leave for digital alternatives; more recently, under the leadership of Redstone's daughter, Shari, it has missed opportunities to sell all or parts of the company at prices it has no hope of getting again.
But even under the best-case scenario, it would be hard for Paramount or any other traditional media company to survive the transition to streaming and digital. Which is why two of the biggest traditional giants — Time Warner and Rupert Murdoch's Fox — took the opportunity to sell most of themselves in 2016 and 2017.