ViacomCBS : VIAC.OQ - ViacomCBS Inc at Goldman Sachs Communacopia Conference (Virtual) Transcript

REFINITIV STREETEVENTS

EDITED TRANSCRIPT

VIAC.OQ - ViacomCBS Inc at Goldman Sachs Communacopia Conference (Virtual)

EVENT DATE/TIME: SEPTEMBER 22, 2021 / 2:30PM GMT

REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us

©2021 Refinitiv. All rights reserved. Republication or redistribution of Refinitiv content, including by framing or similar means, is prohibited without the prior written consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

SEPTEMBER 22, 2021 / 2:30PM, VIAC.OQ - ViacomCBS Inc at Goldman Sachs Communacopia Conference (Virtual)

C O R P O R A T E P A R T I C I P A N T S

Robert Marc Bakish ViacomCBS Inc. - President, CEO & Director

C O N F E R E N C E C A L L P A R T I C I P A N T S

Brett Joseph Feldman Goldman Sachs Group, Inc., Research Division - Equity Analyst

P R E S E N T A T I O N

Brett Joseph Feldman - Goldman Sachs Group, Inc., Research Division - Equity Analyst

All right. Welcome back. I'm Brett Feldman, Goldman's U.S. media analyst. It is my great pleasure to welcome back to Communacopia in our 30th year, Bob Bakish, the CEO of ViacomCBS. Bob, thanks for spending some time with us this morning.

Robert Marc Bakish - ViacomCBS Inc. - President, CEO & Director

Great to be here, Brett, despite it being over video.

Brett Joseph Feldman - Goldman Sachs Group, Inc., Research Division - Equity Analyst

Hopefully, the last time.

Robert Marc Bakish - ViacomCBS Inc. - President, CEO & Director

Exactly.

Q U E S T I O N S A N D A N S W E R S

Brett Joseph Feldman - Goldman Sachs Group, Inc., Research Division - Equity Analyst

All right. Well, this has been a remarkable year for ViacomCBS. You completed a significant capital raise. You launched your flagship streaming service, Paramount+ in the U.S. in a number of international markets and you entered into several partnerships with Comcast. How do you see the company strategically positioned as we head into 2022?

Robert Marc Bakish - ViacomCBS Inc. - President, CEO & Director

Yes. So look, Brett, despite the broader macro backdrop, 2021, in fact, has been a very good year for ViacomCBS and I think one where we really began to demonstrate the incredible value creation potential the company has.

When you look at the company, you really see we have all the pieces required to succeed. We've got a best-in-class content creation capability with a scaled library, and that's across genres and demographics. We've got a rapidly scaling streaming business, both in subscription and in ad-supported. And we've got a legacy business, which continues to be strong and a powerful engine really for streaming transformation. It provides cash, it provides promotional reach, it provides relationships, all that we can build on.

2

REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us

©2021 Refinitiv. All rights reserved. Republication or redistribution of Refinitiv content, including by framing or similar means, is prohibited without the prior written consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

SEPTEMBER 22, 2021 / 2:30PM, VIAC.OQ - ViacomCBS Inc at Goldman Sachs Communacopia Conference (Virtual)

And our company benefits from an extremely strong capital position that was bolstered by the capital raise we did earlier in the year and the ongoing material dispositions we're doing of noncore assets. And that in turn is enabling us to invest in a very compelling ViacomCBS opportunity in streaming.

So fundamentally, we're in a very good place. And as I look to '22, I'd highlight 2 things: First, I really see our international footprint as a key accelerant for us in global streaming, which will unlock a massive total addressable market opportunity for us. And second, I'm super excited about the content build on our flagship service, Paramount+, and confident that we'll enjoy the fruits of it.

Brett Joseph Feldman - Goldman Sachs Group, Inc., Research Division - Equity Analyst

All right. We're going to spend some time talking about all of that. But before we do, last week, you announced a few key management changes. You appointed Brian Robbins as President and CEO of Paramount Pictures in addition to maintaining his current responsibilities leading Nickelodeon. And you also announced that Paramount Television Studios will become part of the premium network group under the leadership of David Nevins, who is the Chairman and CEO of Showtime. Why are you making these organizational changes? And what operational or strategic changes should investors expect as Brian and David take on their new roles?

Robert Marc Bakish - ViacomCBS Inc. - President, CEO & Director

So sure. But before getting into it, I really want to highlight the amazing job that Jim Gianopulos did coming in. He really stabilized Paramount, turned it around and rebuilt it over the last few years. And as you know, he headed Paramount when it was a very difficult position. And he's leaving it in great shape. And for that, I, the Board, the company are very thankful to him.

Now at the core, the changes we announced are about better aligning our organization with our strategy and creating an environment to further strengthen execution. The changes will position Paramount to lean more into franchises and more into streaming while maintaining its extraordinary theatrical legacy including, as exemplified by the fantastic slate we have coming in 2022. And as you noted, it brings together Paramount Television and Showtime's premium content capabilities, which further scales our capabilities in that key sector of the market. So it's really about creating a studio for the future. And as we're doing that, I'm super excited about the leadership we have in place.

Let me start with Brian. Brian Robbins is a content creator, he's a franchise builder and he's a collaborator, which, to me, is an incredibly compelling combination of talents. You look at his resume, and he has a broad and strong content track record. He's done films, he's done streaming, he's done television, he's done digital. And over the last 3 years, he completely rebuilt the Nickelodeon pipeline. And that was by both leveraging franchises and creating new hits. I think equally importantly, he really understands and values today's multi-platform world. He sees the role of theatrical distribution as a powerful franchise builder. You saw that most recently with what he did with PAW Patrol.

He also knows how compelling content drives streaming, as he demonstrated with SpongeBob, iCarly, Rugrats and PAW Patrol on Paramount+ this year. And he understands how social media drives them in, and that really dates back to his Awesomeness deals. As you recall, he founded AwesomenessTV. And so the combination of him now leading Paramount, which, by the way, includes Paramount Players, and Nickelodeon gives him incredible resources to create incremental value through franchises and multi-platform execution.

Likewise, with television's side, David Nevins brings a lot to the table in his newly expanded role. He now has oversight of Paramount Television, which will be part, as you said, part of the premium network group. He, too, is an extremely strong creative executive and has a proven track record and really exceptional taste. So the change allows us to get more leverage from that and is thus additive to what we're doing in scripted content. And it really builds on the recent move we made to have him begin working with Paramount TV and more broadly on production for Paramount+. So I look really forward to, I'm sure, an incredible set of content that's going to now emanate from this larger studio operation he has.

3

REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us

©2021 Refinitiv. All rights reserved. Republication or redistribution of Refinitiv content, including by framing or similar means, is prohibited without the prior written consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

SEPTEMBER 22, 2021 / 2:30PM, VIAC.OQ - ViacomCBS Inc at Goldman Sachs Communacopia Conference (Virtual)

Brett Joseph Feldman - Goldman Sachs Group, Inc., Research Division - Equity Analyst

Earlier, you just mentioned the success that PAW Patrol had at the box office. Despite the fact that it also debuted day-and-date on Paramount+, but you've indicated that most movies will continue to be released with 45-day exclusive theatrical exhibition windows. So I really have 2 questions here. The first is how are you thinking about your film strategy more broadly as the business becomes more streaming-centric? And then for films with theatrical releases, why does a 45-day exclusive window continue to make sense where we've seen some other studios go to windows as short as 17 days?

Robert Marc Bakish - ViacomCBS Inc. - President, CEO & Director

Yes. So I don't think it will surprise you when I tell you we're spending a lot of time on release strategy and really testing different models to maximize the value of that film slate in this evolving landscape, particularly in this COVID-ruled space. So most recently with PAW Patrol, that was actually our first day-and-date release. When I say day-and-date, I mean streaming and theatrical simultaneously. We think that's actually a very good model for kids and family films, again, particularly in this COVID-impacted time, because it gives consumers optionality to view the product where they feel the most comfortable and we did a bunch of research on that. The result of that move, though, was a film which did very well both theatrically and it was a significant driver for Paramount+, where it's actually now one of the most watched originals to date.

So to us, it's clear that, that combined strategy really drove the incremental performance. And in fact, if you look at the box office piece of it, it actually outperformed our green light. And the green light was done assuming it was a traditional theatrical-only release. So very compelling on the performance side, and it really demonstrated the potential for us to [event-ise] content, really leveraging the full set of ViacomCBS platforms to do so. And that even included our consumer products business. I mean we promoted PAW Patrol both through theaters and on Paramount+ on over 2 million boxes at retail. So that, too, helped to build excitement around it.

So we like the day-and-date strategy for families. We are also doing some direct to Paramount+ exclusives. We've got 2 coming shortly in the form of Paranormal Activity and The In Between. And so we think exclusive availability, particularly at lower budget levels, which these films are lower budget levels, is a compelling value creation opportunity for streaming.

And then in general, for the bigger films, as you said, we do like to fast follow theatrical to pay one strategy of 45 days. I continue to think that's the sweet spot of driving theatrical revenue and streaming growth in general. We used that strategy very effectively for A Quiet Place Part II. So it's not that we're going one direction for every film. We're actually using a strategy which has a range of tactics, again, designed to maximize the value of a film across this now broader ecosystem. But as we do that, theatrical definitely still matters.

Brett Joseph Feldman - Goldman Sachs Group, Inc., Research Division - Equity Analyst

All right, talking a bit now about Paramount+. One of the most important metrics in a subscription-based business model is churn. And in the streaming world, low churn is generally reflective of high engagement. So once again, I kind of have a 2-part question, which is can you just provide some color on how Paramount+ subscribers have engaged with your content? And really, the second part is more of a follow-up, which is we're trying to think about the benefit of original series versus reboots versus movies versus sports because you flowed all of that content into the service since it's been launched.

Robert Marc Bakish - ViacomCBS Inc. - President, CEO & Director

Yes. So Brett, look, the good news is we're really seeing a diversity of content popping on the service. It's driving both subscriber additions and engagement. The engagement piece is obviously important to managing churn. We really think this is, again, another validator of our thesis of the value of a broad service, and it really sets the stage for continued growth and momentum for Paramount+.

When you look under the covers at what's driving the consumer, there is no question our film product is working in the stream. And again, as I just mentioned, it's definitely a film-by-film strategy. We talked about the success of PAW Patrol. I mentioned A Quiet Place II. By the way, A Quiet Place

4

REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us

©2021 Refinitiv. All rights reserved. Republication or redistribution of Refinitiv content, including by framing or similar means, is prohibited without the prior written consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

SEPTEMBER 22, 2021 / 2:30PM, VIAC.OQ - ViacomCBS Inc at Goldman Sachs Communacopia Conference (Virtual)

II, great from both an acquisition and engagement perspective. And as part of that, we put A Quiet Place I on the service, and that really had very good engagement as well. And that adds -- or in addition to that, we are using like the whole library for Paramount. And in fact, if you looked at August, library titles, not new releases, but library titles accounted for about 2/3 of the total film minutes consumed. So we're really seeing films kick in as a powerful and multifaceted part of Paramount+.

At the same time, Nickelodeon is really working for us. The best example probably, which I talked about on our earnings call, was iCarly. But we've also seen strong performances from Rugrats, the new Camp Coral series and also the broader new library. So that's a place where we're taking our legacy leadership in kids and transitioning that leadership into streaming, and it's definitely happening. They're scripted, which everyone loves scripted on streaming, particularly probably the people on this call. And scripted is working for us, too. We have titles like Why Women Kill, The Good Fight, of course, multiple Star Treks, and they are all nicely contributing to acquisition and to engagement.

Something that I think is undervalued outside our company, but recognized within our company is unscripted. That's really starting to kick in for Paramount+. MTV's The Challenge worked really well for us. RuPaul, who, by the way, just became the winningest black talent in history from an Emmy perspective, really working well for us, particularly on the acquisition side. So it's a broad range of entertainment product that's driving the consumer.

Add to that sports. There's no question, sports has been an engine. That, too, is part of our thesis. Remember, Paramount+ news, sports a mountain of entertainment. We believe in the linkage between sports and entertainment, and we're seeing it. We made a real commitment to soccer, European football, and we're very happy with how that's doing. And now, of course, football is back, American football. The NFL, 2 weeks in, once again, proving its value and the FCC as well.

So put it all together, we really like what we're seeing in the metrics, both in terms of subs and what we're seeing as a trend line on churn. And it's that mix of entertainment, including movies, franchises, particularly in kids, plus sports and events, it's a real differentiator for Paramount+, and it's definitely driving success.

Brett Joseph Feldman - Goldman Sachs Group, Inc., Research Division - Equity Analyst

Let's talk a little bit more about subscriber trends. You added 6.5 million streaming subscribers in the second quarter. That was actually higher than the net adds that you captured of 6 million in the first quarter, which was the quarter you launched Paramount+ with a lot of marketing behind it. But the streaming market does appear to be getting more competitive and consumers continue to emerge from lockdown. What do you see as the primary drivers of Paramount+ subscriber growth in the back half and going forward?

Robert Marc Bakish - ViacomCBS Inc. - President, CEO & Director

So we start, Brett, with like I'm thrilled with the momentum we're seeing at Paramount+. When we came up with the idea and strategy for it, I fundamentally believed in it. I believed in this idea for a differentiated product. I just mentioned it, one that's broad, includes news, sports and this full spectrum of entertainment and one that can benefit from our extensive reach and relationships globally. And you're really seeing that thesis prove out and it's going to keep going.

So in terms of going forward, I think the drivers for Paramount+ are a mix of both content and continued expansion. On the content side, we're in the late innings or the third quarter. We've had a great third quarter. Films, I mentioned A Quiet Place II and PAW Patrol. On the soccer side, both CONCACAF and now UEFA and American football, the NFL and the SEC. On the episodic television side, we got Big Brother, Love Island, Star Trek: Lower Decks. On the kids side, we have Camp Coral coming back for a second season and Rugrats. And then you look to Q4, which is about to start, you got the whole CBS fall slate, which looks fantastic. By the way, we won the first night of the broadcast season, which is the first time we did that since 2017. We've got the first of our original South Park movies from a new deal we did with Matt and Trey. And then we got compelling new scripted shows, including from Yellowstone creator, Taylor Sheridan, and that's both the Yellowstone prequel, Y: 1883, and a totally new show, Mayor of Kingstown.

5

REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us

©2021 Refinitiv. All rights reserved. Republication or redistribution of Refinitiv content, including by framing or similar means, is prohibited without the prior written consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.