Paramount Global Cuts Streaming Losses, Posts Higher 4Q Profit

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ViacomCBS today announced that the global media company will become Paramount Global (referred to as “Paramount”), effective February 16, bringing together its leading portfolio of premium entertainment properties under a new parent company name.

By Jon Lafayette( Broadcasting & Cable )

Paramount Global reported higher fourth-quarter earnings as it cut costs and reduced losses at its direct-to-consumer business.

Paramount has been the subject of acquisition reports because it is widely seen as being too small to compete in the DTC business. There was also a report that there were talk about about combining Paramount Plus with Comcast NBCUniversal’s Peacock streaming service.

Earlier this month, the company dismissed about 800 employees to lower expenses and now says it expects significant earnings growth in 2024. The layoffs will result in a US$1 billion charge against earnings in Q1 but reduce costs on an annual basis by about US$200 million.

The company also said it will look to lower expenses by producing more shows internationally, like NCIS Sydney and the upcoming season of Billions and a Ray Donovan spinoff.

In the fourth quarter, Paramount’s direct-to-consumer business narrowed its loss on an adjusted operating income before depreciation and amortization (OIBDA) basis to US$490 million, compared to US$575 million a year ago.

DTC revenue rose 34 per cent to US$1.9 billion, with advertising revenue up 14 per cent to US$526 million and subscription revenue increased 43 per cent to US$1.3 billion.

For the full year, adjusted OIBDA was US$4.8 billion,down from US$5.5 billion in 2022.

That means DTC losses peaked in 2022, a year ahead of plan

Paramount Plus increased fourth quarter revenue 69 per cent,compared to a year ago and the company expects the streamer to post a profit domestically in 2025.

Paramount Plus added 4.1 million subscribers in the quarter, reaching 67.5 million subscribers, and average revenue per global average revenue per subscriber (ARPU) increased 31 per cent, thanks in part to a price increase.

Overall, Paramount’s fourth quarter net income was US$514 million, or 77 cents a share, up from US$21 million, or 1 cent a share a year ago, when the company took US$309 million in restructuring charges.

Revenue fell to US$7.6 billion from US$8.1 billion. Affiliate and subscription revenue grew 13 per cent. Advertising revenue was down 11 per cent.

At Paramount’s traditional TV media business, adjusted OIBDA fell 12 per cent to US$1.1 billion as revenues dropped 12 per cent to US$5.2 billion.

Advertising revenues were down 15 per cent to US$2.3 billion. Affiliate and subscription revenue dipped 1 per cent to US$2 billion

At Filmed Entertainment. Revenue was down 31 per cent to US$647 million.

“Our disciplined execution and strong content offering drove our results in 2023, as we continue to evolve our business for profitable growth in 2024 and beyond,” said CEO Bob Bakish.