Paramount Global announced that it reached 61 million subscribers worldwide for its streaming service, Paramount+, in the three months ending June 30. This represents a slight increase from the 60 million subscribers announced in the previous quarter. However, the company was able to reduce its streaming losses during this period.
In terms of financials, Paramount Global reported a quarterly adjusted operating loss before depreciation and amortization of $424 million, down from $511 million in the previous quarter and $445 million a year ago. On the other hand, subscription revenue saw a 21 percent increase year-over-year, reaching $1.2 billion, primarily due to the growth in the number of subscribers compared to the second quarter of 2022.
While subscription revenue performed well, advertising revenue in the TV unit decreased by 10 percent compared to the previous quarter, indicating continued softness. However, Paramount mentioned that some sectors, such as pharma, retail, movies, and travel, were showing signs of strength in the national domestic market. This follows an 11 percent drop in TV ad revenue in the previous quarter and a seven percent drop in the fourth quarter of 2022.
The filmed entertainment segment experienced a 39 percent year-over-year decline in revenue, reaching $831 million. This decrease can be attributed to the comparison with the second quarter of 2022, which saw the release of “Top Gun: Maverick” and generated revenue of $1.4 billion. In the current quarter, Paramount released “Transformers: Rise of the Beasts” to the market.
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Paramount Global’s total revenue for the quarter amounted to $7.6 billion, down from $7.8 billion in the second quarter of 2022. The company reported an operating loss of $250 million, a significant decline from the $819 million profit recorded a year ago.
To bolster its balance sheet, Paramount announced a long-expected deal to sell its book publishing segment, Simon & Schuster. The publishing company will be sold to private equity firm KKR for $1.62 billion. This comes after a previous attempt to sell Simon & Schuster to book publisher Penguin Random House in a $2.175 billion deal, which was blocked by a federal judge on antitrust grounds.
On the earnings call, CEO Bob Bakish addressed the ongoing writers and actors strike and emphasized the studio’s critical partnership with the artists. He mentioned that Paramount had prepared for the strike by adjusting its fall schedule to feature acquired series such as “Yellowstone,” focusing on its sports lineup, and licensing content to third parties. Bakish also highlighted the company’s extensive library of international scripted and unscripted Paramount+ Originals, as well as the upcoming debut of more than 20 local versions of global unscripted formats through 2024.
Bakish expressed his disappointment that an agreement could not be reached to prevent the strike but remained hopeful for a timely resolution. He emphasized the studio’s responsibility to minimize disruptions for its audiences and other stakeholders.
In conclusion, despite the slight increase in Paramount+ streaming subscribers, Paramount Global was able to reduce its streaming losses. The company saw growth in subscription revenue but experienced declines in advertising revenue and filmed entertainment segment revenue. The sale of Simon & Schuster should help strengthen the company’s balance sheet. CEO Bob Bakish addressed the ongoing strike and discussed the studio’s strategies to mitigate disruptions and continue delivering content to its audience.
