NEW YORK—Paramount reported that losses from its streaming operations continued to decline as the company reported growth in streaming subscribers, viewing and DTC ad revenue in Q2 2023.
“In Q2, we maintained our focus on scaling our streaming platforms, maximizing our traditional business, and building a sustainable business model that will return the company to significant earnings growth in 2024,” Paramount president and CEO Bob Bakish said in a statement. “Notably, Paramount+ revenue grew 47%, total DTC ad revenue increased 21%, and global viewing hours on Paramount+ and Pluto TV were up 35% year-over-year. And despite the environment, TV Media continued to contribute significant earnings. As we look forward, we will continue to be guided by our content-first approach and seek to maximize its value across platforms and revenue streams, while also operating with the utmost efficiency through this year of peak streaming investment.”
In the direct-to-consumer segment, Paramount reported that global Paramount+ streaming subs increased by about 700,000 to 61 million in Q2 as Paramount+ and Pluto TV increased global viewing hours 35% YoY.
Overall DTC revenue increased 40% year-over-year as subscription revenue grew 47% to over $1.2 billion, driven by subscriber growth on Paramount+ and advertising revenue rose 21%, driven by higher impressions for Paramount+ and Pluto TV.
More specifically, Paramount+ revenue grew 47%, driven by subscriber growth and increased advertising revenue, the company said.
That growth also helped adjusted OIBDA losses fall from $445 million in Q2 2022 to $424 million in Q2 2023, an improvement of $21 million as higher revenues more than offset incremental costs to support the growth of Paramount+, the company said.
During the earnings call, the company also announced plans to sell Simon & Schuster to KKR for $1.62 billion, a move that will reduce its debts and help fund the financial demands of its pivot towards streaming services.
During an earnings call with analysts, Bakish highlighted the company’s rapidly growing digital advertising business as a way to “mitigate any near-term challenges” with the current soft ad market.
“Paramount has seen sequential improvement in year-over-year advertising in Q2,” he said. “And in the upfront, we just wrapped, Paramount saw positive low to mid-single growth on volume. And in both cases, digital is a point of strength.”
“Paramount is a leader in the digital video ad space, and I want to ensure you understand the extent and depth of our digital ad capabilities,” he continued. “Our direct digital revenue is up by strong double digits year-over-year, powered by the premium content offerings on Paramount+ and Pluto TV. 3 years ago, we launched EyeQ, our digital ad platform as a simple and effective solution for advertisers to connect their brands to consumers at scale. Since then, it has seen incredible growth. The EyeQ footprint now stands at more than 90 million full episode viewers domestically, and we expect to generate revenue approaching $3 billion this year, rivaling the best – the biggest players in digital video, and we’re building upon that strength internationally as well.”
