Paramount Global on Tuesday reported first-quarter results missed Wall Street expectations on sluggish broadcast advertising and theatrical declines, despite a sharp increase in streaming subscribers for Paramount+.
The entertainment giant that runs CBS, Viacom and the Paramount film studios reported revenue dipped 1% to $7.33 million during the quarter, compared with $7.41 million last year. The company said much of the decline was because last year’s first quarter included broadcasting the Super Bowl, a television event that fetches massive ad sales.
But further, Paramount also reported revenue declines across all three of its major business lines –broadcast advertising, filmed entertainment and distribution. This pushed profit lower to $433 million compared to $911 million last year. On an adjusted basis, the company delivered earnings per share of 60 cents, narrowly beating Wall Street projections 51 cents.
Paramount Chief Executive Bob Bakish highlighted the company’s ability to grow streaming subscribers, which has become a key metric for Hollywood’s biggest entertainment companies when reporting financial results. Global direct-to-consumer streaming subscribers from Showtime and Paramount+ grew to 62 million, driven largely by an increase of 6.8 million new additions to Paramount+ compared to the end of 2021.
“Our differentiated playbook – including a broad content line up, a streaming business model that spans ad-supported and subscription, and a global portfolio that links streaming with theatrical and television – drove strength across our entire ecosystem,” Bakish said in a statement.
Paramount’s stock slid more than 5% in pre-market trading right after the earnings report was released, indicating investors were disappointed by the first quarter’s performance. The stock closed Monday at $30.27 on the New York Stock Exchange.
Paramount surprised Wall Street during the fourth quarter of 2021 by revealing a rebranding from ViacomCBS to simply Paramount, and told Wall Street analysts the company was making a big push towards streaming with bullish projections for 100 million subscribers between Paramount+ and Showtime over the next two years.
While Paramount+ this quarter saw a big boost in subscribers, Paramount’s global streaming subscribers hit 62 million and grew by just 6.3 million overall — citing “other direct-to-consumer services subscribers declined, primarily due to timing of new programming” in the earnings report. That amounts to a 500,000 decline in subscribers for its other services, including Showtime and BET+.
Paramount+ though now sits at just shy of 40 million subscribers, up from last quarter’s estimate of 32.8 million, and Paramount also reported that Pluto TV, its free, ad-supported streaming channel, has 68 million monthly active users. Financials wise, DTC revenue went up 82% year-over-year and also had a big quarter in ad-revenue, driven by increased pricing and more ad impressions on both Pluto TV and Paramount+.
Paramount+ was boosted by the launch of “Halo,” a series based on the Xbox video game hit, “Yellowstone” spinoff “1883,” “The Offer” about the making of “The Godfather” and “Star Trek: Picard.” Additionally, family films like “Clifford the Big Red Dog” and “Paw Patrol: The Movie,” as well as the addition of access to local NFL games.
Paramount’s TV media sector however was down 6% year-over-year, even though it still had the NFL Playoffs and the NCAA March Madness tournament, not to mention “Yellowstone” on cable. And Paramount claims that excluding the effects of not having this year’s Super Bowl, TV media revenue would have grown 2%.
Paramount’s theatrical division had a big start to 2022 at the box office, releasing titles including “Scream,” “Jackass Forever” and “The Lost City” that all hit No. 1. But revenue from its theatrical unit, which hit $624 million for the quarter, was still down 27% compared to the same period in 2021 when it had sold both “Without Remorse” and “Coming 2 America” to Amazon amid the pandemic. Both “Scream” and “The Lost City” crossed over $140 million at the worldwide box office, while “Jackass” brought in just over $80 million. And Paramount will kick off next quarter with even better success from “Sonic the Hedgehog 2,” which sits at $323 million at the global box office and counting.