Here's a surprising trend. Older viewers have recently become the primary source of growth in video streaming. Increasing numbers of people 50 and older have been cutting the cord on cable and watching significantly more streaming content, while younger viewers have been reducing the amount of time they spend with those services. Free, ad-supported services are also gaining viewers and advertisers.

Media giant Paramount Global (PARA -1.69%) is positioned to take advantage of both trends. Let's see why.

Old is the new young

As streaming reached critical mass years ago, it was widely accepted that millennials and Gen Z'ers would be the first cohorts to adopt the new technology -- and they were. Baby Boomers and Gen X'ers were expected to lag behind. But now, they're catching up. In May, the share of viewers in the 50-to 64-year-old and 65-and-older age groups grew faster year-over-year than the 35-to-49 cohort.

One possible driver could be the pandemic. Older people, who suddenly had more time on their hands, tried out streaming services and found many of their old favorites along with large libraries of new content. It's important also to remember that most older viewers are retired or work less than younger age groups. Therefore, they can spend more time watching TV, movies, and sports.

Viewer with remote streaming TV

Image source: Getty Images.

Paramount has put out numerous series appealing to older viewers that have become blockbuster hits. For instance, Yellowstone and 1883 are Western-style dramas about the Dutton family and their sprawling Montana ranch. The patriarch is played by Kevin Costner, a wildly successful actor who is himself 67. There's also Paramount's Mayor of Kingstown, which follows the McLusky family's journey through its thriving prison business and its relationship with criminals, politicians, and police. The crime drama genre is highly popular among boomers.

The unsung hero on Paramount's streaming team may be its free, ad-supported platform, Pluto TV. The price of a high-speed internet connection plus the costs of paid streaming subscriptions can make it harder to justify a switch from cable. Free streaming services that look and feel like cable offer a compelling alternative and easy transition to streaming, especially for cost-conscious retirees. Older viewers can get CBS News for free on Pluto TV, too.

Advertisers are going where the eyeballs are and transitioning their marketing spending to these platforms. Total revenue from free, ad-supported platforms is expected to reach nearly $19 billion this year. That's more than double what it was in 2020. As of the end of the first quarter of 2022, Pluto TV had amassed almost 68 million monthly average viewers.

The Paramount+ streaming service also offers a wide range of sports, including NFL, golf's Masters Tournament, college basketball's March Madness, SEC college sports, and soccer. The soccer rights are particularly important because Paramount has a partnership with Sky to grow its Paramount+ service in Europe, where soccer is the dominant sport.

More recently, Paramount won the media rights to the Indian Premier League cricket for five years. India is a massive market, and it's addicted to cricket. In a show of confidence in its streaming business, Paramount raised its 2024 global streaming subscriber target from its previous 65 million to 75 million range to 100 million.

A Buffett stock

In the first quarter of 2022, Warren Buffett's Berkshire Hathaway plunked down $2.6 billion to purchase a stake in Paramount Global. The world-famous value investor is 91 years old, so he doubtless knows a few things about what his age cohort wants to watch.

Paramount recently reorganized its business segments to include a direct-to-consumer segment which houses it streaming business. The nascent segment is not generating positive cash flow, but expects to be profitable in the future. Though the company hasn't spelled out a precise timeline for when it expects that segment to reach profitability, it said losses should peak in 2023. 

Paramount Global stock is down 23% so far this year. Long-term value-oriented investors may see the same value proposition here that Buffett does. And with the stock down since Berkshire Hathaway made its purchase, new investors can get a piece of Paramount Global at a better price than the Oracle of Omaha did.