Friday, April 07, 2023

Paramount Exploring Sale of Majority Stake in Noggin Streaming Service

Paramount Global (PARA.O) is exploring the sale of a majority stake in Noggin, Nickelodeon's online learning platform for preschoolers, the Wall Street Journal reported on Friday (April 7), citing people familiar with the situation.

The company is looking at an opportunity to develop Noggin, which is known for content like PAW Patrol and Peppa Pig, into a more interactive learning platform, and is seeking an investor for the job, the report said.

Paramount wants to retain a stake in Noggin, the report added. The company sees a revenue opportunity from the digital service as a minority investor if someone else develops it, the report said, citing people familiar with the situation. When reached for comment, Paramount+ declined to confirm nor deny the Journal’s reporting Friday, Reuters and TheWrap report.

The reported exploration of the stake sale is part of the company's effort to prioritize it's Paramount+ and Pluto TV streaming platforms. The company said in February it will increase the prices of the service's premium and essentials tiers.

Paramount+ is set to integrate with the company's other streaming platform Showtime. The company expects an impairment charge of $1.3 billion to $1.5 billion in the current quarter from the integration.

Paramount previously said that they wanted to keep Noggin separate from Paramount+ because of the former's unique interactive functionality and access to games.

A potential sale would be the latest in a series of changes at the media conglomerate as the company seeks to beef up its streaming strategy. The report comes on top of the exploration of a sale of a majority stake in BET Media Group, which includes cable channels BET and VH1.

Likewise, Paramount is expected to retain a stake in BET Media Group should a sale of that arm go through.

A source told TheWrap last month that Entertainment Studios founder Byron Allen had started talks with Paramount Global about taking a stake. Tyler Perry’s name has also surfaced. Paramount bought BET in 2000 for $2.3 billion.

The sales of either or both units would come on top of major strategy shifts at Paramount Global over the past year as it aims to boost subscriber growth for its streaming services. The company in February said it ended 2022 with more than 77 million global direct-to-consumer subscribers combined on Paramount+ and its FAST service Pluto TV.

One significant change is the bundling of Paramount+ and Showtime. In August, the company began offering a combined service that includes the Paramount+ library and Showtime’s content within the Paramount+ app. The effort also involves combining the creative leadership of Showtime and MTV Studios, along with the exit of former Showtime co-president Jana Winograde.

Last week, Paramount+ Chief Programming Officer Tanya Giles stepped down after three decades with the company. She had been named CPO in June 2021, and it was under her leadership that the streamer found several huge successes, most notably the Yellowstone spinoff 1923.

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Originally published: April 07, 2023.

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