Bob Bakish

Source: Broadcast file

Bob Bakish

Paramount Global reported a surprise profit in the fourth quarter as well as solid streaming numbers, while revenues at the legacy segments declined over the period.

Overall the media conglomerate’s revenue declined 6% against the year-ago period to reach $7.64bn. That fell marginally against analysts’ forecasts, although there was unexpected profit as adjusted earnings per share reached four cents compared to a forecast loss of one cent.

Shares in Paramount Global rose by a couple of points after trading.

Additionally, executives said the company will take a $1bn write-down in the current quarter for layoffs and restructuring.

CEO Bob Bakish and CFO Naveen Chopra said on an analysts call that the company will be looking to produce lower-cost film and TV in the ongoing drive for profit at the streaming business.

Bakish cited early 2024 box office hits Mean Girls and Bob Marley: One Love as the type of more modestly budgeted features he wants to throw into the mix alongside the costlier tentpoles.

Executives talked up streaming, which presented the most positive element of Q4 earnings. Paramount+ saw 4.1m net additions for global subscribers as membership reached 67.5m. Bakish and his executive team expect the service will reach domestic profitability in 2025. 

Direct-to-consumer revenue overall grew 34% to $1.87bn and losses dropped from $575m to $490m. Subscription revenue climbed 43% driven by price and membership increases.

Advertising revenue across the segment grew 14%, fuelled by growth at paramount+ and the free ad-supported Pluto TV.

However the legacy businesses are not faring so well and there were sharp drops in linear TV advertising and the studio segment as Paramount Global continues to be the subject of ongoing take-over speculation.

In January it emerged that David Ellison’s Skydance Media had made a preliminary offer to buy National Amusements, the Redstone family holding company which controls Paramount Global.

The film division revenues declined 31% to $647m as executives noted lower licensing revenue was mostly the cause. The Hollywood strikes impacted studio rentals and production services.

The company was quick to point out a $2bn year in ticket sales for Paramount and the studio has got off to a strong start in 2024 with Mean Girls and now Bob Marley: One Love both dominating the North American charts in January and February.

However there was no getting away from the numbers. Theatrical revenue for Q4 dropped 20% to $78m and licensing and other revenues declined 32% to $566m in a quarter which compared unfavourably with the year-ago period when Top Gun: Maverick was available on digital and the company licensed Halloween Ends.

TV media revenue dropped 12% against the year-ago period, while advertising revenue dropped 15% to $2.28bn. The general downward trend in linear TV at the company which owns CBS, BET and Nickelodeon was not helped by the impact of the Hollywood strikes on sales.