Paramount Posts $49 Million in Streaming Profits and Adds 3.5 Million Subscribers in Q3, But Movie and TV Revenues Drop

Paramount’s direct-to-consumer division turned a profit of $49 million in the third quarter of 2024 (its second straight quarterly profit) after adding 3.5 million subscribers for a total of 72 million.

But the company’s overall results were mixed; While total revenue decreased by 6% compared to the previous year, the 71% decrease in theater revenue and the 6% decrease in TV Media revenue were also effective in this.

Here are the most important results:

Fixed Net income: $327 million compared to $207 million a year ago.

Fixed Earnings Per Share: 49 cents per share, up 63% from the same period last year, compared with expectations of 24 cents per share by analysts polled by Zacks Investment Research.

Revenues: $6.73 billion, down 6% year over year, compared to the $6.92 billion expected by analysts polled by Zacks Investment Research.

Operating income: $337 million, down 46% from the previous year. On an adjusted basis, operating income increased 20% to $858 million.

Subscribers: Added 3.5 million subscribers during the quarter, reaching a total of 72 million subscribers

The latest quarterly results come as the media giant’s pending $8 billion merger with Skydance Media is on track to close in the first half of 2025, subject to regulatory approval and customary closing conditions. Until then, Paramount will continue to operate as normal.

It also comes as Paramount Global co-CEOs Brian Robbins, George Cheeks and Chris McCarthy are in the midst of reducing its U.S. workforce by 15%, or about 2,000 employees, aimed at saving $500 million in annual operating costs. Focused on redundant functions and streamlining corporate teams, the disruptions affected areas such as marketing and communications, finance, legal and technology.

Paramount shares rose 1.1% in premarket trading Friday following quarterly results.

Paramount is releasing a bright spot

Paramount’s direct-to-consumer division made a profit of $49 million, compared to a loss of $238 million the year before; This is a reflection of revenue growth and cost efficiency.

Total DTC revenue increased 10% to $1.86 billion; This includes $507 million from the growth of Paramount+ and Pluto, a 7% increase in subscription revenue to $1.34 billion, and an 18% increase in advertising revenue with a 150% increase in licensing revenue to $10 million. .

Paramount+ revenue increased 25% to $1.43 billion, driven by year-over-year subscriber growth and an 11% annual increase in average revenue per user. The company does not disclose its quarterly ARPU figure.

Paramount’s TV/media segment reported profits of $936 million, down 19% from $1.15 billion the year before. Total revenue for the segment decreased 6% to $4.3 billion, primarily due to lower affiliate revenue and fluctuations in licensing revenue.

Advertising revenue decreased 2% to $1.67 billion as a result of declines in the linear advertising market; This was partially offset by higher political advertising and underreporting of revenue by an international affiliate in prior periods. Affiliate and subscription revenue decreased 7% to $1.87 billion, driven by: 7%
A 2 percentage point decrease due to a decrease in subscribers and the absence of pay-per-view boxing matches was partially offset by price increases. Licensing and other revenues fell 12% to $760 million; This situation is a reflection of the decrease in licensing volume in the secondary market.

Filmed Entertainment makes a profit but revenue falls as cinema, advertising and licensing decline

Paramount’s Movie Entertainment segment made a profit of $3 million, compared to the previous year’s loss of $49 million due to Hollywood strikes. Total revenue fell 34% to $590 million.

Advertising revenue fell 60% to $2 million. Theatrical revenue fell 71% to $108 million, reflecting the number and timing of screenings in the quarter compared to the prior year. Licensing and other revenues decreased 6% to $480 million, as lower revenue from home entertainment and licensing of movie library titles was partially offset by higher studio facility revenue compared to last year, which was affected by labor strikes.

More to come…