ViacomCBS reported domestic streaming and digital video sales – which includes streaming subscription and digital video advertising revenue – rose to $489 million in the second quarter, up 25% year-on-year, driven by a 52% bump in streaming subscription revenue and robust growth at Pluto TV.
Domestic pay streaming subscribers reached 16.2 million, up 74% year-over-year. Pluto TV’s domestic monthly active users (MAUs) rose 61% to 26.5 million.
The stock popped higher in early trading on the numbers. The company said total ad revenue slumped 27% year-over-year, hit by the COVID-19 impact on global advertising demand and tough comparisons sports-wise to the year-ago quarter that included the broadcast of the national semifinals and championship games of the NCAA Tournament and professional golf.
Consolidated revenue dipped 12% to $6.2 billion. Net profit from continuing operations plunged 51% to $478 million, or $0.77 a shares.
Content licensing revenue was relatively flat, primarily reflecting the licensing of domestic streaming rights to South Park, offset by significant licensing activity in the year ago quarter, as well as the timing of deliveries, which were affected by COVID-related production delays.
Theatrical revenue was “immaterial” in the quarter, the company said, with movie theaters closed in response to COVID-19. That, along with production limitations, knocked total filmed entertainment revenue down by 26% year-on-year. But ViacomCBS said it continued to monetize its library and integrated Miramax films into its offering.
Home entertainment revenue rose 30%, driven by the mix of titles in release, including Sonic the Hedgehog, and higher sales of catalog titles. Licensing revenue decreased 20% due to lower revenues from licensing of catalog titles, as well as the timing of deliveries of programs produced for third parties.
Adjusted operating earnings in filmed entertainment grew 22%, reflecting lower distribution costs resulting from the lack of theatrical and the strong performance of Sonic.
Publishing revenue decreased 8%, mainly driven by lower print book sales as a result of the impact of COVID-19, partially offset by growth in sales of electronic and digital audiobooks. ViacomCBS is looking to sell its publisher Simon & Schuster although the process has been slowed by the pandemic.
The company, which merged late last year, has been expanding streaming service CBS All Access, which recently added more than 3,500 episodes across ViacomCBS brands, including series from BET, Comedy Central, MTV, Nickelodeon and Smithsonian Channel. The platform’s latest Star Trek series, the animated comedy Star Trek: Lower Decks, debuts today.
“ViacomCBS delivered another solid quarter, with clear operational momentum and sequential improvement in key earnings and cash flow metrics. Despite the impact of COVID-19 on revenue in the quarter, we’re successfully managing through the effects of the pandemic, reaffirming the strength of our combined operations,” said CEO Bob Bakish.
“Our results underscored our strong progress delivering on our value-creation initiatives, including integration cost synergies, expanded and new distribution agreements, as well as the rapid acceleration of our streaming business, where we achieved record users and revenue in free and pay while building toward the relaunch of our diversified super service.”