Paramount Sees Q3 Profit Slump On Content Investments, Even As Streaming Subscribers Rise
Getting into the streaming business isn’t easy.
Paramount Global, the New York owner of the CBS broadcast network and Paramount movie studio said it added another 4.6 million subscribers to its Paramount Plus streaming service in the third quarter, news that should be welcomed by Wall Street. To get there, however, it has to invest in new content and marketing, dynamics that took a 36% bite out of operating income and created a tumble in net income for the period.
Net income fell to $231 million, compared with $538 million in the year-earlier quarter. Total revenue rose 5% to $6.92 billion, compared with $6.61 billion in the year-earlier period.
In prepared remarks, Paramount Global CEO Bob Bakish kept his focus on streaming operations. “Looking forward, we couldn’t be more excited about the array of sensational content coming to Paramount+ in the fourth quarter, as well as the launch of the service in France, Germany, Austria and Switzerland,” he said. The company added 4.7 million new streaming subscribers overall in the quarter.
Yet Paramount faced challenges in one of its biggest areas of business — traditional TV. Revenue from its traditional TV networks fell by 5%, with ad revenue down 3%% and affiliate fees off by 5%. Paramount said declines in viewership and subscribers could not offset gains from political advertising or rate increases.
More to come….
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