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Showtime chief’s departure signals Paramount is moving forward on plan to merge streaming services

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Damian Lewis as Bobby Axelrod in the original series “BILLIONS” airing on Showtime.
Jeff Neumann/SHOWTIME

Paramount Global

Along with his departure, Paramount Global is restructuring Showtime in ways that could give the company flexibility to effectively end Showtime as it’s existed for decades — as an independent premium cable network churning out prestige hits such as “Dexter,” “Weeds,” “Billions,” “Homeland” and “Yellowjackets.”

Paramount Global announced Thursday that it’s moving Showtime’s network business under the leadership of Chris McCarthy, who runs other linear cable networks such as MTV and Comedy Central, and the streaming service under Tom Ryan, who runs Paramount Streaming.

The moves come as the company is considering the idea of merging Showtime into Paramount+ and using the network’s hit programming to fuel Paramount+ subscriptions, according to people familiar with the matter. The company’s goal is to have Paramount+ be one of the five largest global streaming services, along with Warner Bros. DiscoveryAmazonNetflixDisney

No decisions about Showtime’s future have been made, and no changes are imminent, the people said.

We are always exploring options to maximize the value of our content investment by giving consumers access to great Paramount content — including the iconic, groundbreaking and premium content offerings of Showtime — across an array of services and platforms,” a Paramount Global spokesperson said.

“This change has also given us the opportunity to more closely align our studios, networks and streaming operations as we execute on our vision and strategy for the future,” Chief Executive Officer Bob Bakish said in the statement.

Showtime’s hazy future

Paramount+ has 43.3 million global subscribers and expects to hit 100 million by 2024. The company hasn’t detailed its number of Showtime subscribers but last reported about 64 million subscribers across all of its streaming services — Paramount+, Showtime, Noggin, BET+ and some other smaller products. Bakish also said earlier this year that Showtime lost 500,000 subscribers in the first quarter as millions of people cancel linear pay TV each year.

Paramount Global announced a bundled promotion in August, allowing Paramount+ subscribers to watch Showtime’s content within the Paramount+ app for $7.99 per month with advertising or $12.99 per month without commercials. That offer was the first step toward potentially making Showtime a tile within Paramount+, fully merging the two services, the people said.

One obstacle to pushing Showtime together with Paramount+ is existing pay TV distributor agreements. The Wall Street Journal reported last month that Paramount has discussed simply shuttering the standalone Showtime network with at least one pay-TV partner.

Another idea under consideration by Paramount Global executives is to move Paramount+ originals and movies to Showtime, effectively making Showtime a mirror to Paramount+’s content that doesn’t appear on other TV networks, two of the people said. That could assuage pay-TV providers, who could adjust pricing against the merged streaming product.

Showtime’s potential evolution into Paramount+ reflects a larger trend in media and entertainment. HBO, Starz, Showtime and Epix — premium cable networks that have long existed as add-ons to basic cable — don’t have the scale to survive against the biggest streaming services. As a result, they’re looking for ways to add content and broaden their audiences. HBO content is featured on HBO Max, which will merge with Discovery+ next year. Starz is looking to separate from Lionsgate so it can potentially merge with other content providers to gain scale.

Eliminating Showtime as an independent entity would also come with cost savings from head count reductions, such as Nevins’ departure, and technology and marketing duplications.

WATCH: CNBC’s full interview with Paramount Global CEO Bob Bakish

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