Paramount makes streaming gains in Q2
August 8, 2023
Paramount Global reported Q2 revenue of $7.62 billion (€6.96bn), slightly above analyst estimates.
The company reported a direct-to-consumer loss of $424 million in Q2 compared to a loss of $445 million in the prior-year period and a loss of $511 million in Q1. The company says it expects streaming losses to peak this year after losses totaled $1.82 billion in 2022.
Subscription revenue grew 47 per cent to over $1.2 billion, driven by subscriber growth on Paramount+ which earlier this year merged with Showtime. The SVoD service saw subscriber numbers reach approximately 61 million, with 0.7 million additions in the quarter. Global viewing hours on Paramount+ and Pluto TV were up 35 per cent year-on-year. Adjusted OIBDA increased $21 million as higher revenues more than offset incremental costs to support the growth of Paramount+. Advertising revenue rose 21 per cent, driven by higher impressions for Paramount+ and Pluto TV.
The TV ad market, however, continued to be a headwind with linear ad revenue decreasing 10 per cent year-on-year.
Filmed entertainment revenues decreased 39 per cent driven by lower theatrical revenues due to the release of Top Gun: Maverick in the prior-year period. Paramount noted that Transformers: Rise of the Beasts performed well, hitting #1 at the Box Office in its first week of release.
Paramount also announced that it has sold Simon & Schuster to investment firm KKR after the publishing giant’s sale to Penguin Random House collapsed late last year. The deal is valued at $1.62 billion.
Paramount CEO, Bob Bakish, commented: “In Q2, we maintained our focus on scaling our streaming platforms, maximising our traditional business, and building a sustainable business model that will return the company to significant earnings growth in 2024. Notably, Paramount+ revenue grew 47 per cent, total DTC ad revenue increased 21 per cent, and global viewing hours on Paramount+ and Pluto TV were up 35 per cent year-over-year. And despite the environment, TV Media continued to contribute significant earnings. As we look forward, we will continue to be guided by our content-first approach and seek to maximize its value across platforms and revenue streams, while also operating with the utmost efficiency through this year of peak streaming investment.”