Paramount+ Adds Nearly 5 Million Subscribers, Breaking 43 Million

In a down quarter for many streaming services, Paramount hasn’t yet peaked. The company’s flagship streaming service Paramount+ added 4.9 million subscribers during the second quarter, growing to over 43 million. That’s despite removing 1.2 million subscribers in Russia. Paramount+’s 4.9 million additions remain down from the 6.8 million subscribers it added last quarter, but it is still a significant gain in a landscape where streaming additions are slowing. Netflix dropped 970,000 subscribers in the second quarter—the streamer’s biggest loss ever. Additionally, NBCUniversal’s Peacock stayed flat at 13 million total subscribers but saw a dip in monthly active users. Paramount once again pointed to its content strategy (both originals and acquisitions) to thank for its domestic growth, including titles like Star Trek: Strange New Worlds and the UEFA Champions League. Titles from last quarter, including Halo and 1883, continued to drive subscriber engagement. During the company’s earnings call Thursday morning, CEO Bob Bakish pointed to box office hits like Lost City and Sonic the Hedgehog 2, which arrived on Paramount+ in May, as significant drivers of engagement. “Their success demonstrates that our strategy of a big theatrical release with a fast follow to streaming is by far the most effective way to maximize the return on our investments in movies,” Bakish said. “Meanwhile, hit CBS originals like NCIS, which consistently dominates ratings on linear, have drawn significant viewership to Paramount+ and driven engagement there.” Paramount Finishes Upfront Ahead of Cannes Lions With High Single-Digit CPM Gains Globally, Paramount grew direct-to-consumer subscribers to nearly 64 million, adding 5.2 million total subscribers. That gain was partially driven by Paramount+ international market launches, including the U.K., Ireland and South Korea. The company's other DTC platforms include Showtime, Noggin, BET+ and more. Paramount+’s revenue grew 120% year over year, and DTC revenue gained 74% year over year. Company revenue overall was up 19%, which Paramount attributed to strong filmed entertainment and DTC growth. The company’s AVOD service Pluto TV also continued to see gains, reaching nearly 70 million monthly active users, up from the nearly 68 million reported last quarter. Paramount also said that total global viewing hours had a year-over-year jump of double digits for the second consecutive quarter. A global company In 2021, Paramount launched Paramount+ in 25 markets across Latin America, Canada and Australia. The U.K, Ireland and South Korea launches were done in partnership with Sky and CJ Entertainment, and the company plans to utilize the same strategy for further European launches. “Hard bundle deals like these allow us to quickly unlock a healthy volume of subscribers at zero acquisition costs and with very low churn,” Bakish explained. In September, Paramount+ will launch as a hard bundle in Italy with Sky Italia, and later in the year, Sky and Paramount will debut the streamer in Germany, Austria and Switzerland, with Canal+ in France. Ad revenue struggles Like its competitors, Paramount saw declines in TV advertising revenue. On the DTC side, ad revenue grew 25%, but the company’s TV media unit dropped 6% year over year, which Paramount attributed to lower linear impressions and foreign exchange. “It's true that there are some challenges in the scatter market and digital, and that really is driven by the state of the macroeconomic environment that's showing up in certain categories,” said CFO Naveen Chopra, pointing to categories like auto being impacted by the supply chain and CPG struggling with inflation issues. “But these aren't long-term issues. They’re short-term challenges we just have to work through. On the positive side, TV clearly remains resilient on a relative basis and that's a function of very tight supply. We benefit at Paramount from having a balance across linear and digital.” Paramount wrapped its upfront in June and saw strong demand and pricing across its entire portfolio, with CPM (cost per thousand viewers reached) increases in the high single digits. “We had broadcast and cable pricing increase at the same high single-digit rate, and we grew digital volume in the range of 30%. Most importantly, it's pretty clear that we grew share,” Bakish explained. Chopra also said that the company expects two category tailwinds to play a role later in the year. “Pharmaceuticals, that came back big in the upfront, that's super important to us because it's a big category for us, given our demographics, and specifically the demos of CBS,” he said. “The second is political. We’re expecting advertising related to the midterms to be very strong, given what's going on there.” Paramount’s UK Streaming Launch Offers a Look at What Happens Behind Its Mountain