Paramount Posts $49M Streaming Profit Amid Gain of 3.5M Subs, Film Unit Swings Back to Black

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As a dedicated fan who has witnessed the tumultuous journey of Paramount Global through thick and thin, I must say that the latest financial results and streaming updates have filled me with a renewed sense of optimism. The swing to a streaming profit from a year-ago loss is a testament to the resilience and adaptability of this Hollywood powerhouse.

On Friday, Paramount Global shared their third-quarter financial results and updates about their streaming services. This includes turning a streaming profit compared to a loss in the same period last year. Notably, this is the second consecutive quarter that their streaming sector has shown profitability. This announcement comes in the second earnings report since the sale of Paramount Global to Skydance Media was announced.

Paramount, at present owned by National Amusements and headed by Shari Redstone, announced that their streaming service, Paramount+, gained approximately 3.5 million new subscribers from June through September, taking its total subscriber count to roughly 72 million.

In the third quarter, Paramount’s streaming unit or Direct-to-Consumer (DTC) segment recorded an operating income before depreciation and amortization (OIBDA) of $49 million, contrasting a loss of $238 million from the same period last year. The DTC segment’s revenue climbed by 10% to reach $1.86 billion, fueled by a 18% growth in advertising income and a 7% rise in subscriber revenue. Paramount+’s revenue surged by 25%, primarily due to an increase in year-over-year subscribers and a 11% expansion in average revenue per user (ARPU).

The comeback of sports giants like the NFL and UEFA, along with original series such as ‘Tulsa King’ and ‘Mayor of Kingstown’, which broke records for global debuts in their second season on our platform, as well as post-cinema releases like ‘A Quiet Place: Day One’ and ‘IF’, contributed significantly to our acquisitions during the quarter,” the company stated.

According to their recent financial update, the conglomerate emphasized that the transactions with Skydance are expected to be finalized within the first six months of 2025. In the meantime, Paramount will carry on running its usual business operations.

In this quarter, Paramount shared their results for the Filmed Entertainment division, where Transformers One was the major debut during the timeframe, and A Quiet Place: Day One, released on June 28 (end of the second quarter), was the top earner at the box office in Q3. The division’s Adjusted Operating Income Before Depreciation and Amortization (OIBDA) showed a significant improvement, moving from a loss of $49 million last year to a profit of $3 million this time around. This change was largely due to a decrease in expenses, which fell from $940 million to $587 million.

In Q3, Film Entertainment earnings dipped by 34% to $590 million. This decline was primarily due to a 71% drop in box office income and a 6% decrease in licensing and other revenue. The reduced box office revenue was attributed to the number and timing of releases this year compared to last, while lower home entertainment sales and film library licensing revenues contributed to the dip in additional income. However, these losses were somewhat compensated by increased studio facility revenue from last year, which had been affected by labor strikes.

In Q3, the Media unit of TV saw a 19% drop in OIBDA to $936 million, with total revenue dipping 6% to $4.3 billion. This decline was mainly due to lower affiliate income and variations in licensing revenue. The company explained that affiliate and subscription earnings dropped by 7%, primarily because of decreasing subscribers and a 2% reduction from the absence of pay-per-view boxing events, although this was somewhat offset by price increases. Advertising revenue fell by 2% as well, but this decrease was partially balanced out by higher political advertising and the recognition of previously underreported revenue from an international sales partner in earlier periods.

In the third quarter, Paramount’s overall earnings decreased by 6% to reach approximately $6.73 billion. Their operating income dropped by 46% to $337 million, but their Adjusted Operating Income Before Depreciation and Amortization (OIBDA) increased by a substantial 20% to hit $858 million.

In August, Paramount made it clear that they were prioritizing a $500 million cost-cutting initiative and aiming for consistent profitability in streaming by 2025. At that time, the company revealed that their cost-cutting strategy would involve reducing their U.S.-based workforce by around 15 percent. The affected departments will primarily be areas with redundancies within marketing and communications, finance, legal, technology, and other support services. These reductions are anticipated to be finalized by the end of this year.

Currently, Paramount is being managed by the CEO’s Office, which includes high-ranking executives such as George Cheeks, Chris McCarthy, and Brian Robbins. Shari Redstone holds the position of Chair.

In their latest financial report, executives announced that our popular content significantly boosted our success during the third quarter. This led Paramount+ to acquire 3.5 million new subscribers, solidifying our place as one of the top four global streaming video services. Moreover, our Direct-to-Consumer segment has shown profitability for two consecutive quarters now, with a total improvement of over $1 billion in the last year. Lastly, we’re making impressive progress in reducing non-content costs across the company, aiming to save $500 million annually.

The threesome observed: “We’ve had two exceptionally powerful quarters behind us, which shows undeniably that we’re gathering speed and our strategy is proving effective, all thanks to our incredibly skillful team members and innovative associates.

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2024-11-08 15:25