Paramount Plus grew its subscriber base by nearly 700,000 accounts during its first quarter since its merger with the Showtime brand, executives revealed on Monday.
The figure was released as part of Paramount Global’s second quarter financial earnings report, which showed revenue from its direct-to-consumer segment grew 40 percent to $1.665 billion.
The income was primarily spurred by subscription fees charged to Paramount Plus streamers for the privilege of watching thousands of television shows and movies, with the service priced between $6 and $12 a month. Around 61 million customers currently subscribe to Paramount Plus in some form, the company said.
Subscription revenue accounted for $1.22 billion of Paramount’s direct-to-consumer revenue, while advertising came in at $441 million. The advertising portion included commercial inventory sold against Paramount Plus as well as Paramount’s free, ad-supported streaming service Pluto TV, both of which grew their global streaming hours by 35 percent, the company said.
Paramount’s streaming business logged a financial loss of $424 million for the quarter, a 5 percent improvement compared to Q2 2022.
Related: Paramount open to more streaming bundles, execs say
Like other media companies, Paramount has been under mounting pressure from investors to generate a return on its streaming ambitions after it pumped hundreds of millions of dollars into the content production, marketing and other resources. As part of a broader realignment of its business, Paramount has issued hundreds of pink slips since the beginning of the year, with positions in its traditional broadcast and cable networks affected the most.
That said, Paramount executives affirmed on Monday that some of its traditional TV content helped generate the most money for Paramount Plus and its other streaming products, with CBS content grabbing nearly half of all total views on Paramount Plus during the quarter. The broadcast network’s content also generated $600 million in licensing revenue during the second quarter, executives affirmed.
Fast Facts: Paramount Global Q2 2023 Earnings
Revenue
- Overall: $7.616 billion (-2%)
- TV Media: $5.157 billion (-2%)
- Streaming: $1.665 billion (+40%)
- Filmed Entertainment: $831 million (-39%)
- Overall loss: $250 million
Streaming (Direct-to-Consumer)
- Revenue: $1.665 billion (+40%)
- Subscription revenue: $1.224 billion (+47%)
- Advertising revenue: $441 million (+21%)
- Expenses: $2.089 billion (-28%)
- Loss: $424 million (+5%)
Television (CBS + Cable networks + International TV)
- Revenue: $5.157 billion (-2%)
- Affiliate and subscription: $2.011 billion (-2%)
- Advertising: $1.946 billion (-10%)
- Licensing & Other: $1.2 billion (+17)
- Expenses: $3.963 billion (-2%)
- Profit: $1.194 billion (-13%)
Filmed Entertainment (TV & Film Studios)
- Revenue: $831 million (-39%)
- Licensing & Other: $589 million (no chg)
- Theatrical: $231 million (-70%)
- Advertising: $11 million (-8%)
- Expenses: $826 million (+30%)
- Profit: $5 million (-97%)
(Source: Paramount earnings report; percent is Q2 2023 compared to Q2 2022)
The traditional television business has been hit particularly hard by a pullback in the advertising sector, as businesses shift their marketing budgets toward connected TV products. While this improved the bottom line at Paramount Plus and Pluto TV, it came at the expense of lower revenue at CBS and the cable networks, which fell $228 million to $1.946 billion, a 10 percent year-over-year decline.
Affiliate and subscription revenue, which includes fees charged to cable and satellite platforms for the rights to offer programming from CBS and the cable networks, dipped 2 percent to $2.011 billion. That part of the business was not impacted by an agreement earlier in the year to distribute nearly 200 CBS affiliates on streaming service Fubo, because the deal primarily benefitted third-party CBS affiliate owners like Nexstar Media Group, Sinclair Broadcast Group, TEGNA and others.
The licensing business helped offset declines in affiliate and advertising revenue at CBS and the cable networks, with Paramount reporting a 17 percent increase to $1.2 billion.
On a conference call with investors this week, Paramount Global’s Chief Financial Officer Naveen Chopra said the company expected “healthy levels of year-over-year affiliate and subscription growth to continue,” but did not elaborate further.
