Industry Insider: The Transparency of Paramount’s 3rd Quarter Earnings Call
On November 2nd Paramount Global held the conference for their third-quarter earnings presentation. Paramount Global has had an impactful emergence as a media conglomerate since its 2019 merger between CBS and Viacomb. Paramount’s CEO, Robert Bakish, and CFO, Naveen Chopra update the evolution of the corporation since then, allowing for a quantifiable measurement to ensure Paramount’s success in the advancement of entertainment consumerism. Robert begins the report by discussing the details of Paramount+ revenue basis. The platform has amplified Paramount’s overall market value as reinforced by this quarter’s consumer approach. The free cash flow, $377 million in this quarter, continued strong especially with the purchase of Simon & Schuster for $1.62 billion that was finalized on October 30th. Robert already sees this purchase being used as a mechanism to pay off debts within the Paramount corporation.
The company’s total revenue has amounted to $7.1 billion with an adjusted OIBDA of $716 million. The overall improvement can be backed by the 31 percent year over year increase of D2C with specific relations to OIBDA for this quarter.
Paramount+ as a whole has garnered over 63 million subscribers since its launch in 2021. With regard to the third quarter alone, the increase of subscriptions was around 60 percent. Naveen attributes this to the operational usage of the Showtime content being available in their Paramount streaming service. While the price increase for streaming platforms has had an overwhelming social backlash recently, Paramount has the numeric value to prove this isn’t the case for them. They have seen a 38 percent increase since the price increase within their D2C model.
To continue the momentum, Paramount introduced partnerships with companies such as Delta to promote the Paramount service, as domestic flyers will have in-flight access to the platform. A similar arrangement has been made with Walmart company to promote series and products simultaneously. At the same time, international efforts have made it feasible for partnered media distributors to access a small selection of CBS and Paramount+ content to keep brand awareness alive across the seas.
In tandem Robert refreshes the details for the new phase of the company with FAST channels such as Pluto TV. Robert confirms that the Pluto TV platform is the most available FAST channel in most countries, meaning Paramount can close the error margin in their international gap by using the method of FAST channels as well. Even with the direct advertisement market maintaining an 18 percent consistency due to the increase of watch hours from both platforms, the general market has had a lapse in revenue across the board in media services. So, Paramount has used its EyeQ service to assist advertisers through the chaos of the current state of the ad market. The anticipation for this project is understood when highlighting the 2024 Super Bowl and presidential election because advertisement buying will hold more power during these events.
In ordinance with their entertainment distribution Paramount Pictures also has great importance to the company overall. This sector facilitated a significant component of content monetization through licensing maintenance. The Teenage Mutant Ninja Turtles and Paw Patrol films released this year would be great examples. Paramount perceives each of the films as successful and they already have plans to continue these narratives with plans for sequels closer to 2026. The film revenue for this year saw an increase of 14 percent due to the heavy hitters of the continuation of the Mission Impossible franchise and Teenage Mutant Ninja Turtles: Mutant Mayhem. Yet, there was a significant loss of OIBDA by $49 million as a reflection of the WGA and SAG strikes, idle expenditures, and an untimely release.
With a tender of $1 billion as an offer for debt payment and the usage of the buyout of Simon & Schuster Paramount Global will seemingly close the year in good hands. The plan for 2024 is clear and concise in terms of the marks that were absently missed this year and should be approved in the following. Naveen closes out the presentation extending the D2C earnings as a high priority for Paramount to maintain and improve in 2024. As it has been made evident through the third quarter, the D2C model holds the most power over the Paramount brand in this era of the company’s life. So, it would go without saying that audiences should anticipate instrumental changes to appear within the streaming platforms and advertisement structure in the near future.
