This sort of consolidation was bound to happen, given today’s competitive streaming environment where even Netflix has seen tougher quarters and has had to embrace advertising in order to further grow its business. There are many options for consumers to choose from in the streaming market, and a stand-alone service like Showtime simply doesn’t have the breadth and depth of content required to stand on its own.

Showtime first launched its over-the-top streaming service in 2015, six years before CBS All Access was rebranded to Paramount+. However, Showtime is not as popular as its younger sister, Paramount+, which makes up the bulk of the company’s direct-to-consumer subscriber base. The streaming service reported 46 million subscribers in Q3 2022. Paramount itself has almost 67 million global subscribers across Paramount +, Pluto TV, Showtime, Noggin and BET+.

The integration isn’t just aimed at boosting Paramount+’s profile on the market; it will also help the linear Showtime network. Paramount said select Paramount+ original programs will soon join the TV network, which provides incremental value for Showtime’s distributors and potentially, more linear customers as well.

The changes will roll out later this year and will involve only the premium tiers at Paramount+, the company clarified. This will allow Paramount+ to better compete agains other premium streamers, like HBO Max, while also differentiating its streaming service by offering a combination of original and premium content, linear channels, live news and sports and Paramount Pictures movies.

Similar to HBO, Showtime’s content tends to have more mature themes, which appeals more to a certain demographic beyond the general market Paramount+ targets. However, both services would benefit from a combined user base and the ability to cross-promote titles.

“This new combined offering demonstrates how we can leverage our entire collection of content to drive deeper connections with consumers and greater value for our distribution partners,” wrote Paramount CEO Bob Bakish in a memo to employees, announcing the news. “This change will also drive stronger alignment across our domestic and international Paramount+ offerings, as international Paramount+ already includes Showtime content. And, very importantly, this integration will unlock operational efficiencies and financial benefits across our broader portfolio,” he said.

Alongside the news, Paramount announced that Chris McCarthy will continue to lead the Showtime studio and oversee network operations for the linear channel. He will also work closely with Tom Ryan, who will oversee the “Paramount+ with Showtime” streaming business.

The company warned that other changes to programming may come about with this transition. For example, in order to focus on building franchises out of Showtime’s hit shows, it will divert investment from underperforming areas that “account for less than 10% of our views.” That means, likely, some cancellations or removals are in order. Paramount says it has begun those discussions with its production partners but didn’t announce which shows are being cut or are being elevated by way of these changes.

The newly merged Paramount+ with Showtime service will be in direct competition with Warner Bros. Discovery, which has 94.9 million global subscribers across HBO, HBO Max and Discovery+. In September, during Goldman Sachs’ Communacopia + Technology Conference, Bakish confirmed that a merger had been discussed internally.

“It shouldn’t surprise you that [we’re looking] to have optionality in the future…Quite frankly, if we weren’t having that conversation, you should fire all of us because we should have that conversation,” Bakish had said.

In August 2022, Paramount+ launched an in-app Showtime bundle for U.S. customers that wanted to upgrade to a plan that included both Paramount+ and Showtime. Paramount had already integrated Showtime content with its streaming product in international markets, as a precursor to the company’s domestic integration plans.