ViacomCBS exceeded Wall Street earnings expectations in the first quarter, paced by the addition of 6 million global streaming subscribers.
The rebrand of CBS All Access as Paramount+ took effect in March in the U.S. and the company began a global rollout. ViacomCBS said it had 36 global streaming subscribers as of the end of the quarter, mostly on Paramount+ but also on Showtime’s OTT service and more targeted outlets like BET+. The tally is more than halfway toward the company’s stated goal of 65 million-75 million subscribers by 2024.
Revenue came in at $7.4 billion for the period ending March 31, ahead of analysts’ consensus forecast for $7.2 billion. Earnings per share of $1.42 also cleared the bar by 20 cents and rose 75% from the year-earlier quarter. Adjusted for non-recurring items, earnings reached $1.52.
Streaming revenue climbed 65% to $816 million, led by Paramount+. The company said key subscription drivers included February’s Super Bowl, the NCAA Men’s Basketball Tournament in March, UEFA Champions League soccer and Oprah Winfrey’s interview with Meghan Markle and Prince Harry.
Nickelodeon was also a “significant driver” of both signups and engagement with Paramount+, headed by SpongeBob SquarePants and iCarly.
Pluto TV, the free, ad-supported streaming service acquired by Viacom in 2019 before its reunion with CBS, hit nearly 50 million monthly active users by the end of the quarter. That reflected a gain of 6 million spread across domestic and international. The service has continued its global expansion, launching in France during the period.
ViacomCBS also said Showtime OTT had its best quarter ever in signups, streams and hours watched. Originals like Your Honor and Shameless, plus theatrical films, paced the growth.
The Super Bowl also propelled overall results. Advertising in the TV Entertainment division, which includes CBS, surged 40% to $1.8 billion.
The picture in Cable Networks was a bit cloudier. Revenue increased 14% year-over-year, driven by growth in licensing, higher streaming advertising and streaming subscription revenue. But advertising revenue, excluding streaming revenue, decreased 7% year-over-year, reflecting a decline in domestic advertising. As they shift more of their focus to streaming, cable programmers like ViacomCBS are managing through a period of secular decline in linear networks as cord-cutting continues.
Paramount Pictures improved over a Covid-19-hit 2020 quarter, with revenue up 23% to $997 million. All but $1 million of revenue was categorized as licensing and “other” as theaters remained largely closed. Licensing revenue increased 55%, mostly from sales to Paramount+ and other outlets.
The studio has also explored co-productions with Netflix on successful, modestly budgeted franchise like To All the Boys I’ve Loved Before. By 2022, Bakish said, an average of one new original movie a week will hit Paramount+. He didn’t offer details, teasing “more on this in the months ahead” during an earnings call with Wall Street analysts.
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