Warren Buffett's firm Berkshire Hathaway originally bought 68.9 million shares of Paramount Global (PARA -1.69%) in the first quarter of 2022. During the second quarter, the Oracle of Omaha added another 9.5 million shares to bring his total ownership to 78.4 million by the end of the year's first half.

Buffett now owns nearly 13% of the company's Class B shares, making him the largest such shareholder. Here's why you should own shares too.

Content is king

In the immortal words of Paramount's founder, Sumner Redstone, "content is king." That may be what Buffett saw when he initially built a position in the company's stock. Paramount's branded networks include Nickelodeon, Comedy Central, and BET. Perhaps more captivating are Paramount's news and sports franchises, which air on cable, broadcast, and streaming platforms.

One of America's favorite sports is football, and Paramount is an NFL staple. The company holds rights to AFC and NFC regular season games, playoff games, and the Super Bowl on a rotating basis with other networks. Its rights also include college football games from the Southeastern Conference and conference championship games from other power conferences.

The list goes on. Paramount also hosts games from regular season college basketball games and the NCAA's wildly popular annual March Madness tournament. Every year, March Madness is followed by another annual sports tradition, the Masters PGA golf tournament. Paramount has the rights to that, too.

A person eating popcorn and streaming TV.

Image source: Getty Images.

Though football is one of the most popular sports in the U.S., soccer is the international favorite. Paramount's soccer rights feature more than 2,000 matches each year from UEFA Champions League, Italy's Serie A, and the National Women's Soccer League, shown on its streaming platform Paramount+.

Paramount's vast content library and sports rights have grown streaming subscribers domestically, but its international partnerships could be the next leg of growth in subs. For instance, the company has partnered with European cable giant Sky to bundle Paramount+ with its cable offering. During the last quarter, Paramount+ launched in the U.K., Ireland, and South Korea. In September, the streaming platform will launch in Italy and later this year in Germany, Austria, France, and Switzerland. The best part of Paramount's partnership strategy is that each new subscriber comes with zero acquisition cost.

Capitalizing on its international sports momentum, Paramount recently won the streaming rights to air Indian Premier League Cricket (IPL) for the next five years. Like soccer in many countries, Cricket is easily the favorite sport in India. However, there is one big difference -- India is the world's second-most populous country. Previously, Disney's Hotstar streaming platform, which has 50 million paid subscribers, hosted IPL matches. Now Paramount will seek to transition those viewers to Paramount+.

Last quarter, management told investors it saw strong acquisitions and engagement on Paramount+ from its new stable of TV shows, which includes 1883 and Star Trek: Strange New Worlds. On top of that, the company's eagerly anticipated theatrical release of Top Gun: Maverick was a smash at the global box office, raking in $1.3 billion and supplanting Paramount's own Titanic at No. 7 in all-time domestic box office receipts.

Buffett bought it, should you?

Buffett likes to buy downtrodden stocks of companies that he believes can thrive in the long run, meaning he likes to buy the dip just as much as anyone else. Paramount stock has certainly dipped, collapsing 32% over the last year.

Part of the reason for the stock's underperformance is due to many investors focusing squarely on subscriber growth. In its second quarter, Paramount added 5.2 million subscribers to its platforms and removed 3.9 million from Russia for a net gain of 1.7 million. Even before accounting for the Russian removals, that number is down from the 6.3 million subs it added in the first quarter.

Other streamers are seeing growth moderate as well. Disney+ subscriber growth slowed in the second quarter, and the company lowered its long-term subscriber goal. Netflix actually lost subscribers last quarter and said losses would likely continue this quarter.

Investor concerns also extend to losses generated by the streamers. Paramount's direct-to-consumer (DTC) segment has lost money in the last two quarters since management began reporting it as an independent segment. Management expects peak losses from its DTC segment to occur next year. Disney expects its streaming platforms to be profitable in 2024.

Building out the infrastructure to host streaming platforms requires an enormous amount of capital, but Paramount is nearing the finish line. After that, ongoing expenditures should diminish considerably. Paramount expects to increase revenue in its DTC segment from $2.3 billion in the first half of 2022 to $9 billion by 2024, a year after peak losses.

If you're truly a long-term investor like Buffett, you'll want to buy and hold the beaten-down stock of this high-quality company and wait a few years. That's a strategy right out of the Buffett playbook.