By Helen Coster
(Reuters) – When the reality series â€œThe Challenge: War of the Worldsâ€ launches on four continents in June, ViacomCBS Inc aims to test a key component of its streaming strategy – using localized content on broadcast TV to attract subscribers to its Paramount+ streaming service, an executive with the entertainment conglomerate told Reuters.
The media giant is launching four versions of the show and airing them on its broadcast TV networks in the United States, Australia, the United Kingdom and Argentina, and streaming episodes on Paramount+ globally the following day, Chris McCarthy, chief content officer for unscripted entertainment and adult animation at Paramount+, said in an interview ahead of his presentation to investors on Tuesday.
Contestants will be reality TV stars from those countries, and the winner from each version will compete in a ten-episode â€œWar of the Worldsâ€ that will air on Paramount+ globally beginning in August. The series is a spinoff of a show that has aired on ViacomCBS-owned MTV for 38 seasons.
ViacomCBS is betting that inexpensive content that can be localized for different markets will help it compete in a global challenge of its own: the race by U.S. streaming services to claim subscribers outside the United States, a market that is becoming more important as streaming services mature.
Production costs for unscripted television are only 10% to 30% those of a scripted series, and the shows are easier to localize for global markets, according to McCarthy. Streaming rivals including Netflix Inc have been pushing into the genre in recent years.
To further reduce costs, ViacomCBS will produce all four international versions of â€œWar of the Worldsâ€ – in which contestants vie for prize money through a series of puzzles and physical challenges – and the final global competition at the same location in Argentina. Production costs are two-thirds what they would be if each of the four broadcast channels produced them independently, McCarthy said.
Reality competition helps to retain viewers who subscribe to the service for live sports, he added.
â€œLive sports and reality competition are really the same viewer,â€ McCarthy said. â€œAnd when we look at the average cost of that same consumer, it’s much lower when we put those two things together.â€
ViacomCBS has plans to launch Paramount+ in 45 markets by the end of 2022, and is playing catch-up to rivals.
As of Nov. 17, Paramount+ and Showtime OTT had 48 million global subscribers. AT&T Inc-owned HBO and HBO Max had a combined 73.8 million subscribers at the end of 2021; Netflix has 221.8 million subscribers and Walt Disney Co’s Disney+ has 129.8 million subscribers, according to the companies.
Paramount has committed $2 billion to streaming content this year and $5 billion by 2024 – a figure dwarfed by the investments of Netflix and Disney+ but in line with Comcast Corp’s plans for U.S. content spend for its Peacock streaming service over the next couple of years.
Reality TV is a staple at ViacomCBS, three decades after its MTV cable network created the genre with â€œThe Real World.â€ â€œThe Challengeâ€ was a â€œReal Worldâ€ spinoff that was originally called â€œThe Real World/Road Rules Challenge.â€ New seasons still premiere on MTV before moving to Paramount+, even though the latest spinoff â€“ â€œThe Challenge: War of the Worldsâ€ â€“ will not air on cable.
If the strategy for â€œThe Challenge: War of the Worldsâ€ is successful, McCarthy said, ViacomCBS is likely to replicate it with the majority of its competition series, such as the tattoo artist show â€œInk Masterâ€ or the drag queen competition â€œQueen of the Universe.â€
Within the genre of unscripted television, competition series like â€œThe Challengeâ€ do the best job of driving subscribers in mature markets like the United States and Australia, said McCarthy.
In emerging markets like Mexico, where â€œtelenovelaâ€ soap operas are still popular on broadcast TV, â€œdocu-realityâ€ series such as â€œJersey Shoreâ€ and its spinoffs including â€œAcapulco Shoreâ€ perform well on broadcast TV, cable and streaming.
The strength of â€œdocu-realityâ€ in emerging markets is why ViacomCBS is launching seven new global versions of its â€œShoreâ€ franchise on Paramount+ in Argentina, Columbia, Croatia and other markets.
An episode in the â€œShoreâ€ franchise costs between $100,000 and $300,000, said McCarthy, compared with $2.5 million to $10 million an episode for a scripted show, on average.
â€œIf you get one really, really successful unscripted that’s a runaway hit, the economics of that are going to be massive because production costs are so low,â€ said CFRA analyst Tuna Amobi.
(Reporting by Helen Coster in New York; Editing by Kenneth Li and Matthew Lewis)