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State of the Screens

Paramount’s Earnings Present an Uphill Battle

By May 11, 2023No Comments

2023-05-11_08-18-04

Four big questions re: Paramount + streaming:
1) How much revenue is Paramount generating from direct-to-consumer?
2) How many subscribers do they have?
3) What share of total TV time do Pluto TV and Paramount+ account for?
4) How much does Paramount spend on content?

Setting the table: Paramount has two primary streaming services in the U.S.:
1) Paramount+ – Subscription based with an ad-free option
2) Pluto TV – Free ad-supported streaming TV (FAST)

Big question #1: How much revenue is Paramount generating from direct-to-consumer?

Paramount’s 2023-Q1 streaming revenue (% of total):
1) Subscription – $1.1B (74%)
2) Advertising – $398M (26%)
3) Total – $1.5B

Paramount streaming ad revenue (YoY growth):
1) 2022-Q1 – $347M
2) 2023-Q1 – $398M (↑ 15%)

Paramount streaming subscription revenue (YoY growth):
1) 2022-Q1 – $742M
2) 2023-Q1 – $1.1B (↑ 50%)

Bottom line: Despite growing revenue by 50%, streaming still lost $511M.

Paramount streaming profit (YoY growth):
1) 2022-Q1 – $456M
2) 2023-Q1 – $511M (↓ 12%)

Why this matters: Paramount needs to cut costs.  On Tuesday, they announced plans to lay off 25% of their U.S. staff.

Big question #2: How many subscribers do they have?

Pluto TV global monthly active users (YoY growth):
1) 2021-Q1 – 50M
2) 
2022-Q1 – 68M (↑ 37%)
3) 2023-Q1 – 80M (↑ 18%)
 
Paramount+ subscribers (YoY growth):
1) 2021-Q1 – 17M
2) 
2022-Q1 – 40M (↑ 140%)
3) 2023-Q1 – 60M (↑ 52%)

Interesting: Paramount (Paramount+ and Showtime) accounted for 26% of all net subscriber additions in the U.S. last year.

Big question #3: What share of total TV time do Pluto TV and Paramount+ account for?

Quick answer: Pluto TV accounts for 1% of total TV time and 2% of streaming TV time.  Paramount+ accounts for less than 0.8% of total TV time.

Big question #4: How much does Paramount spend on content?

Estimated U.S. content spend for Paramount (YoY growth) according to Wells Fargo:
1) 2019 – $13.4B
2) 
2020 – $14.0B (↑ 4%)
3) 2021 – $15.3B (↑ 9%)
4) 
2022P – $16.4B (↑ 7%)
5) 
2023P – $17.8B (↑ 9%)
6) 2024P – $19.5B (↑ 10%)
7) 2025P – $21.7B (↑ 11%)

13B.3-2022Paramount

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Michael Beach

Michael Beach is the Chief Executive Officer of Cross Screen Media, a media analytics and software company that enables marketers to plan, activate, and measure CTV and linear TV at the local level. Michael is also the founder and editor of State of the Screens, a weekly newsletter focused on video advertising that is a must-read for thought leaders in the advertising industry. He has appeared in such publications as PBS Frontline, The Wall Street Journal, The New York Times, Axios, CNBC and Bloomberg, and on NPR’s Planet Money podcast.