Paramount Global demonstrated significant profitability in its streaming endeavours in the first quarter of 2024, as evidenced by a notable 44% reduction in losses within its direct-to-consumer division, bringing the total to $286 million. The company further saw substantial growth in its subscriber base, reaching a total of 71.2 million by adding 3.7 million new subscribers during the quarter.
According to a poll conducted by LSEG, the company reported earnings of 62 cents per share outpacing analyst estimates of 36 cents per share. Despite this earnings beat, Paramount’s revenue fell slightly short of analyst projections. According to data from LSEG, the company posted revenue of $7.69 billion, slightly below analyst estimates of $7.73 billion.
Chief financial officer Naveen Chopra said in a statement, “The team delivered another quarter of strong operational and financial performance — including significant growth in total company earnings and free cash flow — despite the dynamic environment we continue to operate in. As we look ahead, we remain focused on execution and transforming our cost base to best position Paramount for the future.”
Furthermore, Paramount’s Direct-to-Consumer (DTC) segment showcased robust revenue growth, surging 24% year over year to reach $1.87 billion. Within this segment, subscription revenue experienced a notable 22% increase, totalling $1.35 billion, fueled by a combination of subscriber additions and pricing adjustments implemented for Paramount+. Additionally, advertising revenue soared by 31% to $521 million. This increase was driven by the growth of Pluto TV and Paramount+, including the impact of events like Super Bowl LVIII. Notably, Paramount+ revenue skyrocketed by 51% to $1.46 billion, reflecting both subscriber expansion and the growth of average revenue per user (ARPU). It has further reaffirmed its commitment to achieving domestic profitability in the streaming business by 2025.
Meanwhile, in the TV media segment, Paramount reported a 1% increase in revenue, reaching $5.2 billion. Due to the impact of CBS’ broadcast of Super Bowl LVIII adjusted OIBDA (operating income before depreciation and amortization) demonstrated a notable 11% climb to $1.4 billion, and advertising revenue experienced a substantial 14% jump to $2.58 billion. Conversely, affiliate and subscription revenue witnessed a 3% decline to $1.99 billion, driven by decreases in subscribers, partially offset by pricing adjustments. Furthermore, reflecting the residual impact of last year’s Hollywood strikes on available content for licensing, licensing, and other revenues experienced a significant 25% decrease to $651 million.
Paramount’s Filmed Entertainment segment, revenue climbed by 3% year over year to reach $605 million. Moreover, because of the mix of theatrical releases in each respective year adjusted OIBDA losses within this segment narrowed significantly by 97% year over year to a loss of $3 million. Propelled by the strong box office performances of films like “Mean Girls” and “Bob Marley: One Love,” alongside Miramax’s release of “The Beekeeper” theatrical revenue soared by 20% to $153 million. However, advertising revenue within the Filmed Entertainment segment experienced an 80% decline year over year, totalling just $1 million. Similarly, licensing and other revenue saw a marginal 1% decrease to $451 million.