Paramount+ added 9.9 million subscribers last quarter to 56 million and grew revenue 81% year-on-year but streaming losses mounted and costs rose.
Total Paramount Global revenue of $8.1 billion was up 2% from the year earlier. TV Media saw dips in advertising, affiliate and licensing revenue. Shares were down in early trading.
The film studio looked bright on horror thriller Smile, released Sept. 30.
Streaming subscriber growth was driven by the NFL, the expansion of existing franchises like Top Gun: Maverick and 1923, the success of new franchises like Tulsa King and Smile, as well as CBS’s overall entertainment slate.
Global DTC subscribers rose to more than 77 million.
Streaming revenue was up 30% to $1.3 billion year-over-year, including an 81% jump at Paramount+. Subscription revenue rose 48% year-over-year, reflecting Paramount+ gains. Streaming ad sales firmed 4% and subscriptions surged 48%. But adjusted losses widened by $73 million to $575 million as expenses grew — to $1.97 billion from $1.57 billion. Balancing streaming spend with a path to profitability has become key for media companies and Wall Street is watching those trends carefully.
In TV Media, ad revenue fell 7%. Affiliate and subscrption revenue eased 4% with ongoing subscriber declines. Licensing and other revenue declined 11% as it produced less programming for third parties. Operating profit rose 5% however, on lower costs.
The filmed entertainment division saw $87 million in profits on revenue up by 35%, with theatrical surging 149% driven by the box office power of Smile. Licensing and other revenues grew 28% on the home entertainment window led by the continued success of Top Gun: Maverick.
It’s been a tumultuous few weeks for the company amid sweeping changes on the TV side with Showtime integrating into Paramount+ and merging with MTV Entertainment Studios, a consolidation that’s resulted in big leaderships changes as well as layoffs, including 120 this week internally dubbed The Valentine’s Day Massacre at the premium cable network.
Also this week, Warren Buffett’s Berkshire Hathaway said it boosted its investment in Paramount Global last quarter.
“Paramount continues to demonstrate the success of its global multiplatform strategy, with popular content at its core. Nowhere was this more evident than in the growth of Paramount+,” said CEO Bob Bakish. “In addition, in 2022, Paramount Pictures had 6 films open at #1 in the U.S. box office and Paramount regained its position as the most-watched media family in linear television. Our content and platform strategy is working and, with even more exceptional content coming this year, we expect to return the company to earnings growth in 2024.”
He’ll be hosting a conference call with analysts at 8:30 am ET.
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