Paramount+ shows signs of momentum as Netflix stumbles, thanks to originals like '1883’

• Paramount+ gained nearly 7 million subscribers in Q1.
• It's gaining momentum as Netflix stumbles, raising concerns throughout Wall Street about streaming.

Paramount+ is gaining momentum.

The Paramount Global (formerly called ViacomCBS) streaming service added 6.8 million new subscribers in Q1, the company said on Tuesday in its earnings report, bringing the total subscribers for the platform to "almost 40 million."

It follows a troubling first quarter for Netflix, which lost subscribers for the first time in a decade and raised fresh doubts throughout Wall Street about the streaming business.

But there's signs of hope for Paramount+, and not just because of its subscriber growth.

The service, which launched in March 2021 from a rebranded and expanded CBS All Access, is showing momentum in its original and exclusive content, according to the data firm Parrot Analytics.

In past quarters, Parrot Analytics has observed a large gap between Paramount Global's corporate demand share and the platform demand share for Paramount+. The former measures the demand for a media company if it were to consolidate all of its content into one service. The latter measures the popularity of a streaming service's current library of original TV.

Several factors drove the large gap between the two measurements. Most notably, Paramount had licensed hit shows to other distributors and it offered more than one streaming platform, including a standalone Showtime service.

However, Parrot Analytics insights analyst Wade Payson-Denney said, "the data from Q1 2022 suggests Paramount is well on its way to fixing these issues and becoming a serious streaming player, at a critical time in the industry as Netflix begins to shed subscribers and lose market value."

Paramount+ originals have gained in demand

Paramount in Q1 ranked at a healthy No. 3 in corporate demand share, according to Parrot Analytics, behind Disney and the newly formed Warner Bros. Discovery but ahead of NBCUniversal and Netflix.

Paramount+ was at a less impressive No. 7 in terms of platform demand share, but has grown since Q1 2021. It now accounts for 5% of platform share for originals, compared to 3.8% this time last year.

In recent months, the service debuted series like the "Yellowstone" spinoff "1883," season two of "Star Trek: Picard," and the video-game adaptation "Halo."

When it comes to platform demand share for full catalogs, including both original and licensed shows, Paramount+ shows more strength at No. 4, jumping ahead of Prime Video but behind Hulu, Netflix, and HBO Max. After its launch, it was No. 6.

"Getting into that top three or four can mean the difference between being deemed essential in the eyes of consumers, or being cut from the budget," Payson-Denney said.

Paramount+ actually gained more new subscribers in Q1 than Paramount Global gained in total subscribers across its streaming offerings, as "other direct-to-consumer services subscribers declined," the company said. It further suggests that the company should merge its streaming offerings into one mega product.

In recent months, Showtime, Paramount's premium cable offering, has released popular shows like "Yellowjackets" and "Dexter: New Blood," and "Billions" is still in high demand after six seasons, according to Parrot Analytics.

Merging Showtime's streaming component with Paramount+ could give it an edge in the demand rankings, bolstering its platform demand share and growing its subscribers base.