Paramount Global claims that its streaming losses are behind it, even as its linear TV revenue continues to sink. In a new quarterly earnings report released today (Feb. 28), the company said those losses hit their high in 2022, a year ahead of its projections.
Like other media conglomerates, Paramount has struggled in a tough advertisement market. The company said its linear ad revenue fell 15% year-over-year during the last three months of 2023, a steeper drop than the 12% decline analysts had expected. It’s also a starker loss than the 14% drop in advertising revenue recorded in the third quarter of 2023.
Paramount said the loss reflects the “continued softness” in the global advertising market, adding that its revenue was hurt by lower political advertising and the Hollywood actor and writer strikes.
But in good news for Paramount, the company reported a fourth-quarter direct-to-consumer loss of $490 million, less than the $575 million loss during the same time in 2022. Overall revenue for the segment — which primarily accounts for streaming services — hit $1.87 billion for the quarter, above the expected $1.84 billion.
In a statement, Paramount claims that its full-year losses for the category peaked in 2022. CEO Bob Bakish told investors Wednesday that Paramount expects to reach “domestic profitability” in 2025.
The company’s main streaming platform, Paramount+, helped push subscription revenue up 43% to reach $1.34; added 4.1 million net subscribers for the quarter. In total, Paramount+ has reached 67.5 million subscribers.
Paramount also owns Pluto TV, a free ad-supported streaming platform.
“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,” Bakish said in a statement. “And I couldn’t be more thrilled with the early momentum we’ve had across every platform in 2024, demonstrating the power of our strategy and assets.”
Paramount posted revenue of $7.64 billion — a 6% year-over-year decrease — and adjusted earnings per share of $0.04 cents, a 50% decrease year-over-year.
Paramount’s latest earnings report comes just a day after merger talks with Warner Bros. Discovery were reportedly shuttered with “pencils down.” The two entertainment giants had been meeting since at least last December for a deal that would have created one of the world’s largest media companies.
Other suitors, including film production company SkyDance Media and media mogul Byron Allen, have pitched offers to purchase Paramount. Shari Redstone, the Paramount chair who controls its parent company, has been open to offers and has met with technology firms and media giants over the past year.
Comcast, the owner of NBCUniversal, has met with Paramount Global to discuss combining their streaming offerings. One such venture could involve bundling together or merging Paramount Plus with NBC’s Peacock to help bolster the platforms’ success.
“In parallel, we are always looking at alternate ways of creating shareholder value, including potentially through transactions,” Bakish told Yahoo Finance earlier this month. “We will have to see if anything happens in that regard.”
Earlier this month, following a record audience for the Super Bowl, Bakish told employees it would lay off around 800 people, or about 3% of its workforce. The network had broadcast the NFL’s championship game to 123.4 million viewers — up 7% from the year prior — and charged advertisers roughly $7 million for a 30-second ad spot. Paramount stock sunk 4% after the layoffs were announced.
Paramount stock had fallen by more than 1.7% before trading closed on Wednesday. The stock was flat after the bell.