Paramount Global President and CEO Bob Bakish has warned that the company’s fourth quarter advertising revenue is now expected to come in “a bit below” the 2% decline in the third quarter.
“The current market is challenging and we’re in it every day and we see it. That challenge is both on the linear side and the digital side,” Paramount Global President and CEO Bob Bakish told the UBS Global TMT Conference on Tuesday. “As we navigated leading into this point, we had looked for some improvement in some sectors, but we haven’t seen that.”
Despite the challenging environment, Bakish emphasized that the ad business is cyclical and “will turn” — and his conglomerate’s linear networks, from MTV to Nickelodeon, as well as ad-based streamer Pluto, stand to benefit when ad dollars improve. “I can’t tell you exactly when it will turn, but when it does, you’ll really see the power of the portfolio of assets we have,” he added.
In November, Bakish said that the company would be taking additional steps to improve efficiency at the company due to “ongoing macroeconomic pressures” in the industry and advertising market. On Tuesday, Bakish talked in detail about one of the company’s actions: a merger of Showtime’s streaming service and Paramount+.
“It doesn’t make sense to run Showtime as a 100% standalone organization. Certainly, the brand is valuable, certainly it stands for a certain type of programming with consumers and its going to continue to do that and we’ll lean into that. But we don’t have to do it as a standalone,” Bakish said. “We’re doing it as part of an integrated strategy and that’s both true on the traditional television side and on the streaming.”
He also teased that Q4 would be “the biggest in Paramount+ history” and signaled that the streamer will eventually join its competitors in raising prices.
“There is a benefit in the fact that we run a premium tier and an ad-supported tier, and you will probably see us raise price at different points in time so that we can catch any churn down, etc., should that be the case,” Bakish said. “Raise prices on premium first, and then follow up on the ad-supported side.”
Bakish concluded his talk at the investor conference by sharing his thoughts on consolidation in the streaming industry.
“It’s hard for me to bet on anything other than consolidation will happen in the future,” he said. “When it’ll happen, what the combination is, who’s on the top, who’s getting acquired? Who the hell knows? But consolidation will happen and streaming will be part of that.”
Shares of Paramount Global have fallen approximately 8% during Tuesday’s trading session and 44% year to date.