Paramount reports streaming growth, but pay TV decline

Paramount Global has unveiled mixed results for Q3 2022, with growth in its streaming business tempered by a decline in its traditional TV business. Overall revenues of $6.92 billion fell short of expectations and led to a slide in share price.

Bob Bakish

In terms of direct to consumer (DTC) headlines, streaming platform Paramount+ added 4.6 million subscribers, bringing its global total to 46m customers. 1.9m subs were removed from the Paramount+ total, following the launching of SkyShowtime in the Nordics. A JV with Comcast, SkyShowtime replaces Paramount+ in that region.

In revenue terms, the D2C segment grew 38% to US$1.23bn compared with the same period a year ago. Paramount said the streaming platform’s subscriber growth was driven by its US sports portfolio, particularly the NFL and UEFA Champion’s League, as well as the launch of a partnership with Walmart+. Top Gun: Maverick, the hit movie, will join the platform by the end of the year and is expected to boost subscriber numbers. The company is also anticipating a bump in subscribers as it prepares to rollout Paramount+ into France and German-speaking (DACH) markets.

Overall, Paramount’s total DTC business has 67 million, when services like Showtime, BET+ and Noggin are also factored in. During an investor call, Paramount CEO Bob Bakish was especially enthusiastic about the prospects for Showtime, the company’s HBO equivalent: “This next chapter of Showtime is going to be particularly compelling. The Showtime brand will stand more than ever for thought-provoking, distinctive, edgy content. That means it will continue to be a home for great creative ideas. In parallel, I believe you will see us extract more from some core franchises,” he said.

Still in streaming, AVOD/FAST platform Pluto TV performed well, reaching 72 million monthly active users globally and growing its viewing hours by double digits.

Turning to the TV segment, Paramount suffered from a combination of pay TV cord cutting and soft advertising revenue. Revenues were down 5% to $4.9 billion compared to the previous quarter. TV network advertising revenue slipped 3% to $1.9 billion, with the prospects for the rest of the year looking challenging.

Doubling down on his core strategy, Bakish said: “We have two objectives, producing cash flow and margins from traditional media and simultaneously building scale from the most important growth sector in media, which is streaming,” said Bakish.