As a seasoned film enthusiast who has witnessed the evolution of the industry from VHS tapes to streaming services, I must say, the journey of Paramount Global is both intriguing and concerning. The company’s addition of 3.5 million new subscribers to Paramount+ is indeed commendable, but the decline in its TV and film businesses is a stark reminder of the challenges faced by traditional media giants in this digital age.
During the third quarter, Paramount Global managed to secure 3.5 million new broadband subscribers for services such as Paramount+, yet these additions weren’t sufficient to counterbalance significant decreases in their more extensive television and movie ventures.
The owner of the CBS broadcast network, the Paramount movie studio and cable networks Comedy Central said third quarter revenue fell 6% to $6.73 billion from $7.13 billion in the year earlier period, crimped by a 6% decline in revenue from its TV properties and a 34% decline in its movie businesses. Revenue for the company’s direct-to-consumer operations rose 10%.
Similar to its competitors, Paramount finds itself battling to progress in an age where a significant number of former viewers who once tuned in consistently to shows like “CBS Evening News” and “The Daily Show” at set times have shifted towards streaming platforms. These consumers now enjoy their preferred content on their own schedule. With a wealth of popular material, Paramount is burdened by a collection of cable networks centered around entertainment, such as MTV and TV Land, which have seen their influence over the audience wane over time.
Over the past few weeks, the company has been actively reducing its operational costs by approximately $500 million. This move comes as they anticipate a merger with Skydance Media, a media production company headed by David Ellison. The executives have outlined plans for additional cost-cutting measures once the merger is finalized. Paramount announced on Friday that they are aiming to complete this transaction in the first half of 2025.
For two consecutive quarters, our Direct-to-Consumer segment has achieved profitability, with an improvement of over $1 billion compared to the last four quarters. Furthermore, throughout the company, we’re effectively implementing cost reductions that are not related to content, which will save us approximately $500 million annually,” stated the joint CEOs, George Cheeks, Chris McCarthy, and Brian Robbins.
The largest division of the company, its TV sector, experienced a 6% decrease in revenue, amounting to $4.3 billion. This decline is primarily due to a 7% drop in fees received from cable and satellite providers, stemming from reduced subscribers and the absence of boxing events previously hosted by Showtime. Advertising income, however, dipped slightly by 2%, despite an increase in political advertisements associated with the upcoming 2024 presidential election.
Paramount’s film divisions experienced a 34% drop in revenue, reaching approximately $590 million, primarily due to a decrease in box office earnings by 71%. The company explained this decline as being influenced by comparisons with the same quarter last year and differences in the number and timing of film releases during each period.
The company’s self-directed sales activities experienced a 18% jump in advertising income, and subscription revenue grew by 7% thanks to vigorous engagement on Paramount+.
More to come….
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2024-11-08 15:16