Paramount shares nosedive as losses mount despite streaming subscriber growth

Paramount Global has seen its share price drop more than 28% after the US media giant posted a $1.12bn revenue loss in the first quarter, with streaming losses growing.

The decline in overall revenue contrasts sharply with the $441m gain reported in the same quarter in 2022 and comes after the company was hit by a $1.67bn charge for its restructuring of Showtime. Those changes saw 120 staff cuts let go as the brand is merged with the Paramount+ streaming service.

Overall company revenue was $7.3bn, which fell short of Wall Street expectations, while DTC losses stood at $511m, having grown above the $456m reported in the same quarter last year.

Tulsa King

The losses came despite DTC revenue, coming in from services such as Paramount+, Pluto TV and Showtime, rising 39% year on year, with subscriptions generating $1.11bn.

Pluto grows but advertising hit

Paramount highlighted Paramount+ subscriber growth, as the streamer added 4.1 million new subs in the quarter to reach a 60 million total, driven, it said, by original shows such as 1923, Tulsa King, Mayor Of Kingstown and Star Trek: Picard.

AVOD service Pluto TV also increased total global viewing hours by 35% year over year.

The company’s TV and media segment revenue, meanwhile, declined by 8% year over year, including an 11% drop in advertising revenue, with Paramount citing weakness in the global ad market and the impact of fewer NFL games on CBS.

Affiliate and subscription revenue took a small dip of 1% year-over-year, with restructuring causing a shift of revenue from pay-TV to DTC services.

In the Q1 earnings call, CEO Bob Bakish told analysts that the goal of streaming profitability “takes investment”, amid concerns about mounting costs.

“The levers are in place to continue to drive Paramount+ subscriber revenue and ultimately continue down this path to profitability,” he said.

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