Connect with us

International Circuit

ViacomCBS adds 6M global streaming subs in quarter

ViacomCBS added 6 million global streaming subscribers in its first quarter, “driven by” the rebranded Paramount+ service, to reach 36 million global paid streaming users, the entertainment company said Thursday.

The company, led by CEO Bob Bakish, shared the latest user data in its earnings report for the first quarter ended March before the market open, as management on an earnings conference call with Wall Street analysts later said that the “significant majority” of new users were for Paramount+ and the “significant majority” of those were domestic customers.

The firm was created in December 2019 via the recombination of Viacom and CBS Corp. Its paying streaming services are led by the former CBS All-Access, which showed this year’s Super Bowl, that beefed up and rebranded in the U.S. on March 4 as Paramount+, and Showtime OTT. They and smaller services had reached nearly 30 million global subscribers as of the end of 2020, with Wall Street analysts on average forecasting 4.8 million new users for the first quarter, which the firm exceeded.

Advertising-supported streaming service Pluto TV also added about 6 million users worldwide, with growth in the U.S. and in international markets reaching nearly 50 million monthly active users as of the end of March.

For Paramount+, “the biggest drivers of signups were live sports and specials, including the Super Bowl, NCAA Tournament, UEFA Champions League, Oprah With Meghan and Harry and the Grammy Awards, as well as kids’ content, including programming from the SpongeBob universe and iCarly, and original programming, including The Stand and Star Trek: Discovery,” ViacomCBS said. “Original programming, content from cable brands and Paramount movies drove almost half of Paramount+ subscriber engagement. Globally, Nickelodeon programming was a significant driver of signups and engagement on Paramount+.”

Showtime OTT “delivered its best quarter ever in signups, streams and hours watched, driven by originals, including Your Honor and Shameless, as well as theatricals,” the firm added.

Wells Fargo analyst Steven Cahall had forecast 3.5 million Paramount+ net user gains in the first quarter “driven primarily by sports” and 4.3 million global subscription VOD subscriber gains to 34.2 million. He had also projected a gain of 6.4 million Pluto users to 49.5 million monthly active users. “We view sports content such as March Madness, the Super Bowl and the Masters as being most impactful to net adds,” he wrote.

“We accelerated our expansion in streaming with the launch of Paramount+ further enhancing ViacomCBS’ ecosystem of premium, pay and free services,” said Bakish. “Our early momentum in streaming is a testament to the breadth and relevance of our differentiated offerings, as well as our opportunities for growth through Paramount+, as we continue to ramp the availability of live sports, original series and blockbuster movies over the course of the year.”

On an earnings conference call, Bakish said the streaming momentum in the first quarter gave management even more confidence in its streaming strategy.

And he said a recent deal to raise $2.7 billion in capital would help the company’s streaming and broader content push. CFO Naveen Chopra said the capital raise would help take streaming “to the next level” with such priorities as the funding of “more original series and movies exclusively for streaming,” incremental sports streaming rights and an acceleration of international launches and market expansion.

Paramount+ will be available in 45 markets by the end of 2022, management said. Chopra also said that the company would “further reduce the amount of content we license to third-party streamers, instead preserving more of these assets for our in-house streaming services.”

Bakish also touted the broad appeal of Paramount+, including thanks to kids and family content from Nickelodeon. “Nickelodeon is turning into a powerful driver of subscribers and engagement,” he noted, explaining that it accounts for “a strong double digital share of total streams,” but “nowhere near half.”

Bakish said a planned $4.99-a-month version of Paramount+ with advertising, which will launch in June following March’s launch of the $9.99 ad-free version, will broaden the portfolio of service offerings to consumers, including cost-sensitive segments, and distribution partners, adding “another arrow in the quiver” for the firm’s streaming business.

ViacomCBS also posted a first-quarter advertising revenue gain of 21 percent, excluding streaming, to $2.68 billion on Thursday as it changed the metrics it reports. It also detailed its affiliate revenue and streaming revenue, which had previously been included in ad and affiliate figures. Affiliate revenue grew 5 percent in the latest quarter to $2.08 billion, while streaming revenue rose 65 percent to $816 million. Total quarterly revenue grew 14 percent to $7.41 billion.

Net earnings from continuing operations for the opening quarter of 2021 jumped 79 percent to $899 million, while adjusted earnings on that basis grew 39 percent to $961 million.

On the earnings call, Bakish touted streaming subscriber, usage and engagement momentum, citing that Paramount+ watch time for active subscribers was up 17 percent over the year-ago period, and the benefits of the Viacom-CBS merger, saying ad trends were improving as the economy opens up from COVID-19 restrictions.

For the current second quarter, Chopra forecast double-digit ad growth “as demand continues to improve” and scatter ad market prices are at all-time highs.

Overall, ViacomCBS’ quarterly financials exceeded Wall Street expectations, and its stock rose in early market activity.

ViacomCBS shares have had a volatile year. After crossing the $100 mark, they dropped sharply after the liquidation of hedge fund Archegos Capital Management. But various Wall Street analysts have as of late gotten more bullish on the stock.

MoffettNathanson analyst Michael Nathanson recently upgraded it to “neutral.” He also raised his first-quarter forecast for earnings before interest, taxes, depreciation and amortization to a 20 percent gain over the same period of 2019, from 15 percent. He cited affiliate fee growth, but cut his quarterly advertising revenue estimate to a 4 percent drop, citing “more challenging viewership trends.” Noted Nathanson: “In terms of viewership, Viacom’s portfolio of cable networks was down 18 percent in the first quarter, with TeenNick, Nicktoons, Nickelodeon and VH1 performing especially poorly.”

In ViacomCBS’ film unit, first-quarter revenue grew 23 percent to $997 million, “reflecting growth in licensing revenues partially offset by a decline in theatrical revenue,” which was “immaterial” due to  the “closure or reduction in capacity of movie theaters in response to COVID-19.” Licensing and other revenue increased 55 percent thanks to licensing of programming to Paramount+ and third parties, as well as revenue from the licensing of Miramax titles. Adjusted operating income before depreciation and amortization (OIBDA) in the film division increased from $27 million to $204 million, “primarily due to higher licensing revenue.”

ViacomCBS’ cable networks unit grew quarterly revenue 14 percent to $3.26 billion, “driven by growth in licensing, as well as higher streaming advertising and streaming subscription revenue.” Ad revenue here fell 7 percent, “largely because of a decline in domestic advertising, partially offset by higher international advertising.” Affiliate revenue rose 3 percent despite pay TV subscriber declines. Streaming revenue grew 70 percent, “fueled by advertising revenue growth from Pluto TV and other digital video platforms, as well as growth in subscribers for subscription streaming services, including Showtime OTT, BET+ and Noggin.” Adjusted OIBDA in the unit increased 49 percent to $1.18 billion driven by the higher revenue.

TV Entertainment unit revenue in the first quarter climbed 19 percent to $3.51 billion thanks to CBS’ broadcasts of tentpole sporting events and subscriber growth at Paramount+, partially offset by the timing of licensing. Ad revenue jumped 40 percent, “reflecting CBS’ broadcasts of Super Bowl LV and NCAA Tournament games, partially offset by lower linear impressions.” Streaming revenue rose 58 percent, “primarily due to subscriber growth at Paramount+ and Super Bowl LV digital advertising.

Adjusted OIBDA in TV Entertainment fell 22 percent to $449 million, though, reflecting “investments in Paramount+.”

Mergers and acquisition were also a topic on Thursday’s earnings call, with Bakish saying a recent deal to acquire WarnerMedia’s Chilevisión and its Spanish-language content library and production capabilities would further boost ViacomCBS’ Latin American reach and production business. Hollywood Reporter

Click to comment

You must be logged in to post a comment Login

Leave a Reply

Copyright © 2023.Broadcast and Cablesat

error: Content is protected !!