Greetings from Brooklyn, and welcome back to What I’m Hearing+, covering the data behind the dealmaking in streaming. Tonight, an inside look at why Shari Redstone’s Paramount Global wants to sell a majority stake in BET. But first…

The Mandalorian is still the most in-demand series in the U.S. right now, but the season-over-season decline comes as Disney is getting more conservative with its content investment. If Mandalorian is losing its footing, and Boba Fett failed to perform at the level of Mandalorian’s second season, when does the pullback begin? Andor was critically beloved, but saw the lowest ratings of any live-action Star Wars series on Disney+. If Mandalorian were to end after the fourth season, which Disney has already ordered, it’s unclear what Disney has in its arsenal to supplant it—especially for a company where the live-action film slate is effectively dormant, and the live-action TV slate is increasingly in trouble. Disney+ is practically built around Star Wars fans, so that’s a nasty dilemma to resolve with a possible recession around the corner.

Anyway, long story short, it’s hard to imagine that Redstone would have endured her various burdens to recombine the companies—winning her way back into her father Sumner’s heart, evicting his girlfriends, peacing-out Les Moonves, sunsetting Philippe Dauman, paying out Joe Ianniello, etc. etc.—only to sell them off for parts. Sure, Shari likely gets advice from bankers about the value of, say, the film studio to a company like Netflix, but she has resisted. As my partner Matt Belloni recently noted, Redstone and her C.E.O. Bob Bakish also rebuffed a gesture from a David Nevins-led group to buy Showtime. Bakish insists that Showtime is more valuable as a matrixed asset within the parentco than as a one-time windfall, even if it’s $3 billion.

Redstone and Bakish, however, have had a different stance regarding BET, the brainchild of media magnate Richard Johnson, who launched BET in 1980, turned a profit in 1985, and sold it to Viacom for around $3 billion in 2001. Paramount wants to sell it—presumably to put more money towards its core streaming business—with Black entertainment moguls like Diddy, Tyler Perry and Byron Allen expressing interest in taking over the network.

BET is an interesting brand. It’s iconic, but it’s not as innovative as others in its peer set. With the launch of BET+, the company tried to move into the cord cutting era by creating an additive approach to the iconic brand for a younger audience. The question ahead of any potential sale is not necessarily how much BET is worth now, but rather how much bigger it could be if it were spun out of Paramount and into the hands of a team more focused on its success. BET could theoretically become a legit flywheel business under Diddy or Perry: feature films for theaters; merchandise with high profile designers; events focused on the Black community; and, of course, the streaming service.

I’m sure all of these ideas are already in the deal books. But to really see just how much potential a BET could have when operated as a standalone outside of Paramount’s control, we can look at two other companies: Starz and Crunchyroll.

Black audiences are an increasingly sought-after and lucrative audience, as evidenced by FX’s Atlanta, HBO’s Insecure, and the massive box office success of Creed III, whose recent opening weekend audience was 36 percent Black. In 2015, Black Netflix employees presented executives with data suggesting that Black audiences were profoundly underserved on the platform; only about 2 million Black households were subscribing to Netflix, according to an internal memo reported in 2020 by the New York Times, or about 5 percent of total subscribers. The memo also estimated that “Black households were a $1.4 billion revenue opportunity,” according to the Times. Of course, this isn’t a new realization: Starz pivoted its entire Encore lineup in 2012 because “continued over-indexing in TV usage by African-American audiences created marketplace opportunities for us,” according to then Starz executive David Baldwin.

Simply put, Starz realized the Black audience was seeking out more quality entertainment made with them in mind, and a few companies saw the opportunity. Starz’s most popular franchise is Power, from 50 Cent’s G-Unit Productions, which just signed a new overall deal with Fox. Power has spun off five series, and represents a whopping 23 percent of total demand for Starz’s catalog, according to Parrot Analytics, where I work as director of strategy. While Starz over-indexes in attracting Black audiences compared to how other mainstream services perform with Black audiences (1.52x), it still trails BET (1.74x). For comparison, Starz would sit at under 1.5x the average of all other services without the Power franchise.

BET should be able to capitalize on a similar opportunity. The network is still the go-to linear destination for Black audiences in the U.S.; BET+ hit 1.5 million subscribers in March, up from around 1 million just six months prior. BET is a more historically important brand than Starz, but it suffered for years as Viacom and then ViacomCBS and then Paramount Global focused on other areas, restructured, and reallocated budget. It’s harder to create a flywheel business out of a network that is receiving less attention or is considered less integral to corporate leadership than if it was owned by someone like Perry, Diddy, or Allen, who would be specifically incentivized to make the business a success rather than just another arm of a conglomerate. This isn’t just me pointing out the obvious; CNBC also reported that executives within Paramount felt similarly.

All three of these Black billionaires are prodigious content creators and have considerable OTT and DTC chops. Diddy’s Revolt, a multi-medium entertainment company that includes a linear network, FAST offering, and podcast production company, continues to grow. Since 2012, the linear network alone has grown from 25 million households to 80 million. Tyler Perry Productions already programs a ton of the BET slate and has seen strong success globally at the box office with relatively small production budgets. Furthermore, more than 90 percent of the total box office haul came from the U.S. If this audience could be served across theatrical and streaming through stronger content decisions and exclusive programming, it could turn BET or BET+ into a necessity for more households, not just a nice thing to have. This is crucial within a moment where Americans have more to choose from than ever; and more to cancel.

Under Diddy or Perry, BET would have the freedom to make moves in new mediums without worrying about earnings calls or appealing to public markets investors. The downside is that independent cable channels have struggled as part of cord cutting. BET is no exception. Whereas the power of a conglomerate is generating larger subscriber fees, without the backing of a larger company, trying to navigate the future of a linear network becomes increasingly difficult. If Diddy wants to create a Black-led and Black-focused media empire of tomorrow—across all linear, digital, and social avenues—BET can be an anchor, but the focus will have to be on moving the BET brand into a community and fan oriented platform across as many platforms as possible, not just trying to reimagine the BET linear offering. If Perry wants to use BET+ to create a flywheel business across theatrical films, streaming originals, and licensing, or using Paramount+ as a partner to generate additional interest, it can be done so with focused and renewed energy.

Crunchyroll is sustained by absolutely rabid fandom. Not only can Crunchyroll take two episodes of a series (Demon Slayer), throw it into theaters, and gross $10 million, its audience is all in on the series and franchises they love. This spans games, films, and TV series, as well as transmedia elements, like cosplaying TikToks and super active Tumblr accounts. There are competitors, like Netflix, but Crunchyroll has one core advantage—it’s directly tied into Japan’s production houses.

Think about this from the BET perspective. If more in-demand Black creators, actors, writers and production companies are inclined to work with a revamped BET, one that superserves an audience, then BET may have a serious competitive advantage over the Netflixes, Disneys, and Apples of the world. I’m not naive enough to argue it would win project after project, but approaching an audience with more foresight in underserved areas, and with a focus on artist participation, would elevate BET. For example, Crunchyroll allows for back-end revenue and data-sharing agreements, its president, Rahul Purini, recently told The Hollywood Reporter. Putting the focus on creators, and making the outlet feel like a shared cultural win instead of a purely commoditized relationship, can make all the difference.

The reality is that what BET needs to become probably can’t exist under Paramount. Shari Redstone is beholden to what works now and what serves shareholders best. Taking a bet on community and fandom often means operating with enough freedom and speed to make seemingly minute, but in fact large decisions about how core I.P. and emerging franchises are handled. That requires executives with authentic awareness of a community’s needs, a grip on how the new technologies drive new programming, and strong talent relationships that can produce in-demand content across undersaturated genres. The BET of tomorrow may exist under Diddy, Perry, or Allen; it certainly won’t exist under Shari.