Paramount+ streaming losses to drop after strong Q3 numbers

Paramount+ grew its subscriber base to over 63 million at the end of September after adding 2.7 million subscribers in the third quarter.

The growth came despite price increases for the service, boosting ARPU for the service and overall streaming revenue.

Paramount+ ARPU grew by 16% year-on-year. Overall subscription revenue for streaming grew by 46% to US$1.3 billion. Streaming advertising revenue grew by 18% reflecting growth both from Paramount+ and FAST platform Pluto TV. Paramount+ revenue grew by 61%.

On the company earnings call, CEO Bob Bakish said that the combination of Paramount+ and Showtime was delivering results.

The company was able to say that forecast direct-to-consumer losses this year will be lower than in 2022, although losses in the fourth quarter are expected to be about the same as last year.

Ad revenue for the three months to September stood at US$1.258 billion.

Adjusted operating income before depreciation and amortisation improved by 31% to negative US$238 million.

Total company revenue grew by 3%, with revenue from linear channels remaining flat. Paramount as a whole turned in sales of US`$7.1 billion with TV accounting for US$4.6 billion, down 8%. A sharp drop in advertising revenue to the tune of 14%, along with decline in licensing and other revenue of 12%, accounted for the decline. Filmed entertainment was up 14% to US$891 million.

“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%. In fact, we now expect DTC losses in 2023 will be lower than in 2022 – meaning streaming investment peaked ahead of plan. Looking ahead, we remain on the path to achieving significant total company earnings growth in 2024,” said CEO Bob Bakish.