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Paramount’s global performance fell short of Wall Street forecasts, with soft advertising at its TV/media group exacerbating ongoing losses in its streaming business and a decline in its filmed entertainment business last quarter. The stock fell nearly 15% in early trading
Q1 2023 revenue was flat (down 1%) year-over-year at $7.26 billion. The company swung from a profit of $433 million to a loss of $1.1 billion.
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TV/media sales were down 8% and advertising sales were down 11%, reflecting
Global ad markets and NFL games on CBS are down. Licensing and other revenues decreased 15% year-over-year, primarily reflecting lower licensed content. Operating income fell 15%.
Total Paramount+ subscribers reached 60 million, with 4.1 million new subscribers added during the quarter. Streaming’s operating loss widened to $511 million from $456 million. Executives have warned Wall Street that losses are expected to peak this year as the company continues to spend heavily.
DTC revenue grew 39% YoY.Subscription revenue up 50% to $1.11B, primarily reflecting Paramount+ subscriber growth, including prior gains
Launched in international markets. Advertising revenue grew 15% year-over-year, driven by strong engagement in Paramount+, with revenue up 65% year-over-year, driven by subscriber growth and higher advertising revenue.
Global user growth is driven by a strong content segment, including top original content such as 1923 King of Tulsa and return mayor of kingston and Star Trek: Picardmovie franchise Top Gun: Maverick and Teen Wolf: The Movie, and the NFL playoffs. The Paramount+ with Showtime bundle also benefits from a robust Showtime content section, including Your Honor and yellow jacket.
Film and television entertainment sales fell 6%.
Visibility into the advertising market, the timing of streaming profits and the impact of labor action in Hollywood are top priorities ahead of an upcoming conference call with executives. Paramount is the first major studio to report numbers and speak to Wall Street since the WGA strike began this week. The night went dark immediately, and many TV shows were affected, including Yellowjackets.
The guild is on strike when its contract with the Union of Motion Picture and Television Producers expires and there are no new ones. At issue is compensation for writers in a changing media landscape that will be dominated by streaming and where the threat of artificial intelligence looms.
“Paramount continues to demonstrate the strength of its content engine, fueling momentum in streaming, TV and theaters. This has led to Paramount+ and Pluto TV hitting major milestones with 60 million subscribers and 80 million monthly active users, respectively, while CBS is on track to No. 1 broadcast for the 15th consecutive season,” Bakish said. “Looking ahead, we are focused on continuing to drive market-leading streaming growth while navigating a dynamic macroeconomic environment. In addition, our updated dividend policy announced today will further enhance our ability to create long-term value for our shareholders as we There’s a shift toward streaming profitability.”
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