Paramount Global, the media conglomerate behind CBS, Paramount Pictures, and Comedy Central, reported mixed results for the third quarter of 2023. While the company's streaming service, Paramount+, showed promising growth, its traditional TV and film divisions faced significant challenges.
The company added 3.5 million new subscribers to Paramount+ during the quarter, bringing the total subscriber count to 72 million. This growth in the streaming sector led to a 10% increase in revenue for Paramount's direct-to-consumer operations.
However, the positive news from the streaming side was overshadowed by declines in other areas. Overall revenue for the quarter fell 6% to $6.73 billion, compared to $7.13 billion in the same period last year. The TV division, which remains Paramount's largest business unit, saw a 6% decline in revenue, while the film division experienced a sharp 34% drop.
The company's earnings also took a hit, with reported profits of just $1 million, or 0 cents per share, compared to $295 million, or 43 cents per share, in the previous year. These figures were impacted by one-time charges, including $104 million related to FCC license impairment and $321 million in severance costs associated with layoffs and the departure of former CEO Bob Bakish.
Paramount, like many traditional media companies, is grappling with the ongoing shift in consumer behavior from traditional TV viewing to on-demand streaming services. This transition has particularly affected the company's cable networks, such as MTV and TV Land, which have seen their audience share diminish over time.
In response to these challenges, Paramount has implemented cost-cutting measures, aiming to reduce expenses by $500 million. The company has already achieved 90% of its targeted cuts and expects to complete the remaining reductions by the end of the year.
Looking ahead, Paramount is preparing for a merger with Skydance Media, led by David Ellison. The deal is expected to close in the first half of 2025 and may bring further operational changes and cost reductions.
Despite the current headwinds, Paramount remains optimistic about its future, particularly in the streaming space. The company's focus on growing Paramount+ subscribers and expanding its direct-to-consumer offerings suggests a strategic shift towards digital platforms as it navigates the evolving media landscape.