Gate Keeper: Paramount will look to license its content rather than jumping into the streaming fray.

Gate Keeper: Paramount will look to license its content rather than jumping into the streaming fray. Photo by Ringo Chiu.

Once mighty Paramount Pictures Corp., the storied studio behind such classic films as “Risky Business” and “The Godfather,” finds itself in a supporting role these days.

The 107-year-old studio is a bit player in the megamerger that’s scheduled to reunite Paramount-parent Viacom Inc. and CBS Corp. by the end of 2019.

In a recently released 12-page investor relations presentation on the deal, Paramount was mentioned just twice. And in the investor call that accompanied the report, Paramount did not come up at all.

It might seem odd for a Hollywood icon to take such a low profile, but it’s in keeping with Paramount’s newly conservative approach.

While other studios in town are scrambling and spending to launch their own streaming platforms and challenging theatrical windows, Paramount is going back to basics.

Watch: Why Paramount’s Buck-the-Trend Strategy Is Worth Monitoring

Under Chief Executive Jim Gianopulos, the studio is looking to ramp up production and leaning into its vast library — which includes the “Star Trek” and “Mission: Impossible” franchises — to license content to streamers and movie theaters.

“I think Paramount is smart to avoid that coming battle by not creating its own streaming service,” said Gene Del Vecchio, a business professor at USC. “There is a lot of money to be made in licensing since streaming services will have an enormous appetite for content.”

The approach is getting favorable reviews from Hollywood observers, who see the studio in recovery mode after a decadelong decline.

“There is an advantage to being somewhat of an independent arms dealer,” said David Miller, a media and entertainment analyst at Imperial Capital. “There is plenty of demand.”

Road to recovery

The only legacy studio physically situated in Hollywood, Paramount has been in business since 1912. It employs more than 1,800 people, most of them in Los Angeles County.

Gianopulos took over in March 2017 after 26 years at 21st Century Fox, including 16 as chairman of that studio, which today is part of Walt Disney Co.

He inherited a company that had lost $450 million in the previous fiscal year and was competing with mid-major Lions Gate Entertainment Corp. for sixth place in global box office revenue, well behind former peers like Disney and Warner Bros. Entertainment Inc.

Two years after Gianopulos’ arrival, Paramount remains a second-tier box office performer, but the studio is profitable.

Paramount generated $85 million in second quarter net income. It also reported $877 million in revenue for the quarter, a 14% jump from the same period a year earlier — and a 41% increase from the second quarter of 2016.

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