NEW YORK—Paramount Global reported significant third-quarter improvement in its direct-to-consumer business in the third quarter, with Paramount+ adding 3.5 million subscribers to tally 72 million overall.
But the beleaguered media conglomerate’s third-quarter earnings call wasn’t all rosy, as cord-cutting and a difficult ad market hurt its overall financial results. Revenue fell to $6.731 billion for the period, down 6% from $7.133 billion a year earlier, and operating income fell to $337 million, down 46% from $621 million a year ago.
Total direct-to-consumer revenue, including both subscription service Paramount+ and FAST platform Pluto TV, was $1.86 billion, up 10% from $1.69 billion a year earlier as DTC profitability improved significantly year-over-year, the company reported.
DTC subscription revenue grew 7%, driven by year-over-year subscriber growth and pricing increases for Paramount+, while DTC advertising revenue rose 18%, reflecting growth from both Paramount+ and Pluto TV.
Overall, Paramount+ revenue grew 25% and DTC adjusted operating income before depreciation and amortization (OIBDA) increased $287 million year-over-year to $49 million, reflecting revenue growth and cost efficiencies.
But declines in the pay TV business and a difficult market for linear TV advertising continue to hurt the company’s TV Media division.
TV Media revenue, including Paramount’s pay TV networks and CBS, decreased 6% to $4.3 billion, primarily driven by lower affiliate revenue and fluctuations in licensing fees, while TV Media advertising revenue decreased 2%, the company said.
In addition, TV Media affiliate and subscription revenue decreased 7%, driven by subscriber declines and a 2-percentage-point decrease from the absence of pay-per-view boxing events, partially offset by price increases. TV Media licensing and other revenue decreased 12%, reflecting a lower licensing volume in the secondary market.
As a result, TV Media adjusted OIBDA decreased 19% to $936 million.
