The company presented losses of 1.1 billion dollars during the first quarter of the year, but despite the negative impact of the huge investment in the global expansion of Paramount +, Bob Bakish, CEO of Paramount Global, is confident in the future of the streaming project
Paramount Global presented billion-dollar losses, 1.12 billion dollars to be exact, in the financial report corresponding to the first quarter (Q1) of 2023, with the numbers resulting in the high investment made for the expansion of the Paramount+ platform, the restructuring of Showtime and the sensible drop in ad revenue from TV advertisers (11% less, year-over-year), in addition to a reduction in profits in other areas such as cinema and licensing.
Despite this, Bob Bakish, CEO of Paramount Global, is optimistic about the future outlook for the business: “Our momentum is strong,” he said in a conference call given after the release of financial results. “We see signs of stabilization in the ad market [and] a path to streaming profitability and a return to free cash flow in 2024.”
On the positive side, Paramount+ surpassed 60 million subscribers around the world, adding more than 4.1 million during the first four months of the year and seeing its earnings grow by 65% year-over-year. According to the company, global subscriber growth “was driven by a strong slate of content that includes top originals like 1923, Tulsa King and the returns of Mayor of Kingstown and Star Trek: Picard, hit film franchises in Top Gun: Maverick and Teen Wolf: The Movie, as well as the NFL Playoffs”.
Pluto TV, for its part, reached 80 million active users and ranked as the number one option among FAST services around the world.
In total, revenue from DTC (direct-to-consumer) products increased 39% year-over-year. Operating Profit before Depreciation and Amortization. (OIBDA) fell, instead, by 55 million dollars year-over-year, due to the “high costs to sustain the growth of Paramount+”.
In TV media, CBS is heading into its 15th year in a row at the top of the ratings. Affiliate and subscription revenue increased 12% as the combination of linear and streaming continues to deliver net growth for the business.
On the other hand, TV earnings fell by 8% year-over-year, with a drop of 11% in terms of advertisers.
Licenses and other revenue decreased 15% year-over-year, primarily reflecting a lower volume of licensed content.
Theatrical also reduced earnings by 6% year-over-year. Theatrical revenues decreased $4 million, reflecting the timing and mix of new releases and licensing and other revenues decreased $35 million primarily due to lower revenues from consumer product licenses.
“Paramount continues to demonstrate the strength of its content engine, driving momentum across streaming, television and theatrical. This resulted in Paramount+ and Pluto TV reaching significant milestones with 60 million subscribers and 80 million MAUs, respectively, while CBS is poised to claim the #1 spot in broadcast for the 15th straight season,” Bakish noted in the press release. “Looking ahead, we are focused on continuing to drive market-leading streaming growth while navigating a dynamic macroeconomic environment. In addition, the updated dividend policy we have announced today will further enhance our ability to deliver long-term value for our shareholders as we move toward streaming profitability.”
