Recently, entertainment giant Paramount (PARA) made a move away from Nielsen, which was basically the historic leader in television ratings. Ratings are, of course, vital to television, as they measure a show’s popularity and its reach to audiences, which determines how much commercials can be sold for during those time slots. But Paramount may be out of Nielsen for good, and the speculation is giving Paramount a fractional boost in the closing minutes of Tuesday’s trading session.
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The problem with Nielsen right now is that it has historically worked best with television ratings. The problem, however, is that linear television is in active decline, noted a report from The Wrap. Worse for Nielsen, however, is that other networks are also less than pleased with how Nielsen handles ratings measurement. If Paramount leaves for good—which it might—then that may prompt other networks to throw Nielsen over.
That would represent a hole below the waterline for Nielsen, and its ability to replace the revenue that would be lost would be minimal, if present at all. Thus, this is Nielsen’s opportunity to improve its position and win back some doubting customers. However, with a growing body of competitors like VideoAmp—which won Paramount’s business—and Comscore, among others, Nielsen may be too late to improve.
FAST Rising
Meanwhile, the media landscape only got more fragmented over time. In fact, Paramount is now looking more closely at the Free Ad-Supported Television (FAST) market, as Europeans are finally making the move away from linear television to streaming options. Cable-cutting in Europe did not catch on the way it did in the United States, according to some reports. However, that is rapidly changing, noted a Deadline report.
Indeed, Paramount has a great and growing presence in European streaming. Its Pluto TV, for example, is available in 35 different countries, with over 400 different partners helping it get on as many screens as possible. It is also working to at least approximate the linear style of television so as not to prove too great a culture shock and help keep viewers in the fold.
Is Paramount Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Hold consensus rating on PARA stock based on three Buys, six Holds, and four Sells assigned in the past three months, as indicated by the graphic below. After a 13.36% loss in its share price over the past year, the average PARA price target of $12.67 per share implies 20.72% upside potential.
