How Paramount+ Hit 63 Million Subscribers and Increased Revenue 61%

When it comes to revenue, Paramount+ is leaving no (Yellow)stone unturned. During an earnings call today, Paramount revealed that its Paramount+ streamer increased revenue by 61% thanks to subscriber growth and increased advertising revenue. For Q3, the streamer increased global subscribers by 2.7 million net additions, hitting 63 million overall. There are a few reasons for the subscriber and revenue increases, including the company debuting Paramount+ with Showtime in June, along with price increases for its streaming plans. As such, ARPU (average revenue per user) went up 16% year-over-year, and subscription revenue for direct-to-consumer grew 46% to reach $1.3 billion. The company said the June price increase performed better than expected, and more price increases would come in the future. Additionally, with a staggered rollout of its price increases, Paramount expects more ARPU benefits in Q4. CBS Is ‘Virtually Sold Out’ of Super Bowl Ads Part of the justification for the increases is the strength of Paramount's content, including Yellowstone, which has reached more than 100 million viewers across platforms over the last five years, according to the company. Consumption also increased, with global viewing hours across Paramount+ and Pluto TV growing by 46%. And with that growth, streaming ad revenue rose 18%. "We continue to execute our strategy and prioritize prudent investment in streaming while maximizing the earnings of our traditional business. In Q3, we successfully grew direct-to-consumer revenue and Paramount+ subscribers while narrowing DTC losses over 30%," Bob Bakish, Paramount CEO and president, said in a statement. "In fact, we now expect DTC losses in 2023 will be lower than in 2022." Paramount expected "significant total company earnings growth" in 2024, Bakish noted. Time to bundle up Regarding Disney's recent Charter deal, which brings streaming opportunities to cable subscribers, Bakish noted there could be a positive impact on revenue and distribution if more bundles operated that way. "As we go forward, it is possible that some of our partners will embrace a strategy that more tightly integrates DTC into the pay-TV bundle, and we expect that if they do, the bundles would have many of the same advantages we've observed in the various hard bundles we've deployed internationally," Bakish said. "Namely, a dramatically lower cost of acquisition and improvements in streaming churn." Bakish said such deals had "the potential to be additive" to the company's model. Advertising is still paramount The CEO noted that the industry isn't seeing the second-half recovery initially expected for advertising, also crediting revenue impact to the ongoing SAG-AFTRA strike. Thus, TV advertising revenue decreased by 14%, which the company said came from softness in the global ad market and lower political advertising. According to the company, sports demand was healthy year-over-year, and there was growth in CPG, alcohol and automotive; however, other categories such as tech and pharma were weaker than expected. Helping to offset any headwinds, Paramount announced earlier in the day that CBS was "virtually sold out" of Super Bowl ads and "pacing well ahead" in ad sales with the game still a few months away. Fueling more ad growth, the company recently announced the global expansion of its digital advertising platform EyeQ. According to Paramount, Pluto TV will fuel EyeQ’s international debut with a footprint across four continents and more than 35 territories. Additionally, the 2024 introduction of a Paramount+ ad tier in select international markets, including Australia and Canada, will accelerate EyeQ’s ad-supported reach. During the call, Paramount said EyeQ now reaches more than 100 million full-episode monthly unique viewers in the U.S. alone.