Paramount Global, the renowned media conglomerate behind brands like CBS, Showtime, BET, Nickelodeon, and its namesake movie studio, recently released its fourth-quarter earnings report. While the company fell short of revenue expectations, it surprised investors with a quarterly profit and impressive performance from its streaming platform, Paramount+.
In terms of earnings per share, Paramount surpassed estimates by posting 4 cents per share, compared to an expected loss of 1 cent. However, the company reported a revenue of $7.64 billion, falling short of the projected $7.85 billion. Despite this decline, Paramount’s profit for the last three months of 2023 amounted to $514 million, or 77 cents per share, a significant increase from the previous year’s $21 million.
One of the standout performers for Paramount was its streaming segment. Paramount+, the company’s flagship streaming service, saw a substantial increase in subscribers during the period, reaching 67.5 million, with a net increase of 4.1 million subscribers. The streaming service also experienced an impressive 69% year-over-year revenue growth. Paramount expects to achieve profitability for Paramount+ by 2025.
Notably, subscription revenue for the fourth quarter grew by 43%, driven in part by price increases. The entire direct-to-consumer segment also saw a revenue growth of 34%. Additionally, global viewing hours across Paramount+ and Pluto TV increased by 27% during the fourth quarter.
Paramount CEO Bob Bakish expressed his enthusiasm for the company’s performance, stating, “Looking ahead, we continue to be focused on maximizing the return on our content investments and scaling streaming while transforming the cost base of our business.” He also highlighted the early momentum achieved across every platform in 2024, underscoring the power of the company’s strategy and assets.
While Paramount’s streaming segment flourished, other areas faced challenges. The company’s TV media revenue declined by 12% year over year, with advertising revenue dropping by 15%. This decline was attributed to overall softness in the global advertising market and a 5-percentage point impact from lower political advertising. Paramount’s filmed entertainment sector also experienced a significant decline of 31% in revenue due to lower licensing revenue.
In response to the rapidly changing media landscape, Paramount has been exploring sale options for all or parts of its business. However, discussions with Warner Bros. Discovery regarding a potential acquisition have since halted.
To mitigate costs, Paramount announced approximately 800 layoffs earlier this month. However, the company achieved record viewership numbers for the Super Bowl, indicating the enduring popularity of its content.
While Paramount has faced challenges in recent years, with shares declining by over 50%, the company’s streaming performance and unexpected profit in the fourth quarter provide a glimmer of hope. As Paramount continues to navigate the evolving media landscape, maximizing the potential of its streaming platforms and optimizing its content investments will be crucial for future success.
Please note: This story is developing, and updates will be provided as new information becomes available.
