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Highlights:
Paramount Global's third-quarter revenue fell short of estimates, impacted by declines in its cable business and a lack of major box office hits.
The company’s streaming service, Paramount+, saw significant growth, adding 3.5 million subscribers, driven by NFL content and new programming like "Tulsa King."
Revenue from Paramount's filmed entertainment business dropped 34%, with limited theatrical releases and lower home entertainment sales.
Paramount Global (NASDAQ:PARAA) reported a mixed set of results for the third quarter of 2024, missing revenue expectations amid challenges in its traditional media and filmed entertainment divisions. The company’s overall revenue for the quarter reached $6.73 billion, falling short of the analyst consensus of $6.95 billion. This shortfall was primarily attributed to a decline in its TV media business, which includes CBS and MTV, due to lower advertising spending, reduced cable subscriptions, and the absence of major pay-per-view events like boxing.
The cable TV business has faced continued erosion as consumers increasingly cancel traditional TV subscriptions in favor of streaming services. This shift has created margin pressures for media companies, including Paramount, as they work to improve profitability in their streaming segments. Despite these challenges, Paramount’s streaming services, particularly Paramount+, experienced notable growth.
Paramount+ saw a surge in subscribers, adding 3.5 million new users in the quarter, reversing a previous loss of 2.8 million subscribers. This increase was driven by a combination of NFL content and the release of new popular shows, such as the second season of "Tulsa King." The streaming unit reported an adjusted operating income of $49 million for the quarter, a significant improvement from a loss of $238 million in the same period last year.
Revenue from Paramount’s filmed entertainment division dropped 34%, driven by fewer movie releases and a decline in home entertainment sales. The only major theatrical release for the quarter, the animated "Transformers One," generated $127 million in global box office revenue, highlighting the challenges the company faces in the film sector.
Paramount's merger with Skydance Media, announced in July, is expected to strengthen its content creation capabilities and enhance its digital platforms, including Paramount+ and PlutoTV. The merger is scheduled to close in the first half of 2025, signaling the company’s continued efforts to adapt to the evolving media landscape.
