Paramount Streaming Losses Shrink, Subscribers Reach 61 Million

As the writers and actors strikes continue to disrupt the entertainment industry, Paramount added a modest 700,000 subscribers to its main streaming service, Paramount+, the company announced during an earnings call this evening. The gain is far smaller than the 4.1 million subscribers it added last quarter; however, along with the additions, the company's subscription revenue rose 47%, and Paramount hit 61 million subscribers total. For the quarter, streaming losses fell to $424 million—down from $511 million in the first quarter. And overall, the company said revenue for its streaming operations (which includes AVOD service Pluto) is up 40%. Regarding the falling subscription adds, CFO Naveen Chopra said the decline is due to “seasonal softness” as well as a “strategic shift” in content release strategy to “better align with the launch of Paramount+ and Showtime." Paramount Finishes Upfront With Volume Increases In June, Paramount officially debuted Paramount+ with Showtime, which the company expects to generate $700 million in expense savings. The tier launch came with price increases in both the existing premium Paramount+ tier and its essential tier. Subscriber growth is expected to be higher in the second half of the year, but the third quarter will see a dip of just over a million subscribers due to a restructuring of a Latin America bundle deal. Ad sales are up Following Paramount closing its upfront talks, CEO Bob Bakish said revenue gains came from improvements in digital advertising on Paramount+ and Pluto, though linear TV sales still struggled with a soft market. “Paramount has seen sequential improvement in year-over-year advertising in Q2. And in the upfront we just wrapped, Paramount saw positive low-to-mid singles on volume,” Bakish said during the company’s earnings call. Chopra also pointed to DTC advertising growth improving due to subscriber gains and engagement across Paramount+ and Pluto, as well as improvements in direct programmatic buying activity. “Looking ahead, we expect to see continued acceleration in DTC advertising growth in Q3, and we’re also bullish about the long term,” Chopra said. The strike marches on Like most other media companies, Paramount has been forced to adjust its upcoming CBS fall slate due to the ongoing strikes. Because of the delays and stoppages of production, Chopra estimates that free cash flow in the second half of the year will be “significantly higher” than previously expected. Recently, Warner Bros. Discovery CFO Gunnar Wiedenfels also said that the company had saved $100 million in the quarter due to the Hollywood strikes. Bakish opened Paramount’s call by saying the company hopes for a “timely resolution” of the strikes but added that the company is well-positioned to weather the stoppages. “We’re saddened that, as an industry, we couldn’t come to an agreement that would have prevented this,” Bakish said. “So we remain hopeful for a timely resolution, and we are committed to finding a path forward.” CBS Reveals When Yellowstone Will Make Its Fall Debut Pointing to the adjusted CBS fall slate, Bakish emphasized the strength of the sports offerings, including the addition of the Big 10, as well as Paramount+ content like SEAL Team arriving on CBS. “The slate illustrates the strength of our global multiplatform asset base and strategy, and it’s one of the ways we’re staying nimble,” Bakish said. “Given our international production capabilities, we have more than 85 International scripted and unscripted Paramount+ originals already produced, in production or greenlit, as well as more than 20 local versions of global unscripted formats slated to debut through 2024.”