Paramount+ reached 63 million subscribers and increased revenue by 61%

Global viewing hours across Paramount+ and Pluto TV grew 46%, with DTC-adjusted OIBDA improved by 31%. The company now forecasts DTC losses peaked in 2022.

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Paramount reported its Q3 2023 earnings results, highlighting that Paramount+ increased revenue by 61% and reached more than 63 million global subscribers; global ARPU expanded by 16%. Moreover, global viewing hours across Paramount+ and Pluto TV grew 46%, with DTC-adjusted OIBDA improved by 31%. The company now forecasts DTC losses peaked in 2022. Finally, total affiliate and subscription revenue increased by 14% as the combination of linear and streaming continues to yield growth. Total company revenue grew 3%.

"We continue to execute our strategy and prioritize prudent investment in streaming while maximizing the earnings of our traditional business. In Q3, we successfully grew Direct-to-consumer revenue and Paramount+ subscribers while narrowing DTC losses by over 30%. In fact, we now expect DTC losses in 2023 will be lower than in 2022 – meaning streaming investment peaked ahead of plan. Looking ahead, we remain on the path to achieving significant total company earnings growth in 2024," Bob Bakish, Paramount's President & CEO, said.

Paramount continues to progress on the path to streaming scale and profitability. DTC remains on track to drive significant earnings improvement in 2024. Revenue increased 38% year-over-year, with subscription revenue grew 46% to $1.3B, driven by subscriber growth and pricing increases for Paramount+ and revenue from pay-per-view events. Advertising revenue rose 18%, reflecting growth from Paramount+ and Pluto TV.

Global viewing hours across Paramount+ and Pluto TV grew 46%. Paramount+ revenue grew 61%, driven by subscriber growth and increased advertising revenue. Paramount+ subscribers reached more than 63 million, with 2.7M net additions in the quarter. Paramount+ global ARPU expanded 16% year-over-year. Adjusted OIBDA improved by 31%, a higher revenue more than offset incremental costs to support the growth of Paramount+. The company now forecasts full-year DTC losses in 2023 will be lower than in 2022, with DTC losses in Q4'23 similar to Q4'22.

TV Media contributed significant revenue and earnings, driven by the strong performance of CBS content spanning live sports, news, and entertainment. Notably, the NFL on CBS is delivering its best season viewership in years. Revenue was $4.6 billion, with affiliate and subscription revenue was substantially flat. Lower affiliate revenue was offset by revenue from pay-per-view events. Advertising revenue decreased 14%, reflecting continued softness in the global advertising market and lower political advertising. Licensing and other revenue fell 12%, driven by lower revenue from original content produced for third parties. Temporary production shutdowns impacted content available for licensing due to labor strikes. Adjusted OIBDA was over $1.1 billion, equating to a 25% adjusted OIBDA margin. Adjusted OIBDA decreased 7%, reflecting the revenue decline, partially offset by lower costs for content and marketing.

Filmed entertainment continued to drive significant value across the company, including theatrical, streaming, and licensing. Q3 included the extensions of multiple popular franchises in "Mission: Impossible – Dead Reckoning Part One," "Teenage Mutant Ninja Turtles: Mutant Mayhem," and "PAW Patrol: The Mighty Movie." Revenue increased 14% year-over-year. Theatrical revenue grew 63%, primarily driven by the releases of "Mission: Impossible – Dead Reckoning Part One" and "Teenage Mutant Ninja Turtles: Mutant Mayhem." The debut of "PAW Patrol: The Mighty Movie" drove consumption of the broader franchise, with the PAW Patrol library serving as a top engagement driver on Paramount+. Licensing and other revenue decreased 7%, reflecting the prior year's success of "Top Gun: Maverick" in the digital home entertainment market and lower revenue from studio rentals and production services due to labor strikes. Adjusted OIBDA was a loss of $49 million. The decrease from the prior year reflects the timing and mix of theatrical releases in each year, as well as incremental costs incurred during production shutdowns and lower revenue from studio rentals and production services.

MORE "YELLOWSTONE"
Paramount said it would launch the final installment of "Yellowstone" on its Paramount Network in November 2024, a year later than initially planned. The show is unavailable on Paramount+ in the US, as NBCUniversal’s Peacock previously picked it up. Paramount+ will, however, be carrying the new spin-offs titled 1944 (working title) and 2024 (working title). The shows will join others from the franchise, including 1883 and 1923, with MTV Entertainment Studios and 101 Studios continuing to produce.

According to Parrot Analytics, Paramount Global has seemingly done everything Wall Street demanded of Hollywood in recent years. It selectively and strategically licensed key titles on the open market while reclaiming others for its uses, built both a growing FAST service to augment its ad revenue and a mid-sized but growing SVOD service, released a steady stream of theatrical box office hits throughout the pandemic, and churned out the most-watched broadcast network and the most-watched hit on linear TV. All the while, it's used its linear assets to prop up its direct-to-consumer ambitions.

In Q3 2023, Parrot Analytics found the following top-line datapoints for Paramount Global:
- Paramount Global Corporate Demand Share: 11.9% (third place)
- Paramount+ US Total Catalog Demand Share: 10.2% (fifth place)
- Paramount+ US Originals Demand Share: 5.8% (sixth place)
- Paramount+ Global Originals Demand Share: 4.9% (sixth place)

Paramount+’s bets on "Star Trek" and the Taylor Sheridan series continued to pay off, as those two franchises accounted for seven of the top 10 series available on Paramount+ in Q3 2023 with US audiences. Sheridan’s latest, "Special Ops: Lioness," debuted in July and was among the top 2.9% of series across all platforms in Q3 2023. Paramount+’s originals demand share did drop from 6.0% to 5.8%, but this is still much higher compared to Q3 2022 (5.1%) and Q3 2021 (3.9%). In an effort to beef up its content offering amidst the dual labor stoppages, CBS began airing the first season of "Yellowstone" in September. This Paramount Network original streams on NBCUniversal’s Peacock, a result of the aforementioned pre-2019 licensing decisions.


Demand for "Yellowstone" increased 12% during the five weeks CBS ran season one episodes. In fact, demand for the series while it aired reruns on CBS was roughly the same as when it aired new episodes of season four of Paramount Network in late 2021. This suggests "Yellowstone" was able to find new audiences on CBS and get repeat viewers to watch the show on a Paramount-owned entity — in other words, audiences that Paramount Global could monetize. And yet, Paramount Global’s stock price continues to fall since the re-merger, and in a clouded and crowded ecosystem, the path forward remains uncertain.

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