Paramount+ Drops 2.8 Million Subscribers to Land at 68 Million, but Made $26 Million in Profit
While the subscriber decline was expected, Paramount+’s financials appear to be heading in the right direction.
Is this the last time we’ll get an earnings update from Paramount’s three-headed “Office of the CEO”? Paramount Global unveiled its second quarter 2024 earnings report on Thursday afternoon, revealing that Paramount+ had lost 2.8 million subscribers, bringing its new total to 68 down from its first-quarter total of 71.2 million. However, the decline was part of a planned exit from a hard bundle in the South Korean market.
So, despite that subscriber top-line dip, Paramount’s streaming did have good news as the company’s direct-to-consumer (DTC) segment turned a $26 million profit with Paramount+ revenue increasing 46% year-over-year. The streamer’s global average revenue per user increased by 26%, but Paramount Global did not release those specific statistics.
“Our strong performance in Q2 demonstrates that we are delivering on our strategic priorities,” the Office of the CEO said in a statement. “We are proud of our results, including significant earnings growth largely driven by our DTC segment. In fact, for the fourth year in a row, Paramount+ is leading the industry in domestic sign-ups driven by our big broad hit TV series and blockbuster films. DTC profit growth for the past four quarters has totaled nearly $900 million and we are on track to reach domestic profitability for Paramount+ in 2025.
“Looking ahead, we will continue to aggressively execute on our Strategic Plan which focuses on transforming streaming to accelerate profitability, streamlining our organization — including at least $500 million in annualized cost savings — and improving the balance sheet by growing free cash flow and optimizing our asset mix. We are confident that our Plan will drive long-term value by leveraging our broad hit content as we continue to transform Paramount for the future.
What’s the Latest with Paramount’s Merger?
The Paramount story that has dominated headlines all throughout the second quarter is, of course, its efforts to be bought or merged with another company. That process saw the departure of former company CEO Bob Bakish, who was replaced by a troika of Paramount executives: CBS CEO George Cheeks, Showtime and MTV Entertainment CEO Chris McCarthy, and Paramount Pictures and Nickelodeon CEO Brian Robbins.
The company saw several suitors emerge, but the most likely buyer in the process was Skydance Media CEO David Ellison. Ellison and Paramount negotiated for months, at one point entering into an exclusive haggling window that ended without a deal. But the two sides stayed in contact, and the Paramount committee tasked with finding a deal approved the merger offer from Ellison in early July.
That offer included a 45-day “go-shop” period, which ends on Aug. 21. Billionaire Edgar Bronfman Jr. is still reportedly considering a bid, and a most-likely fake bid from a firm calling itself Apex Capital Trust emerged in the strangest twist in the saga yet in early August.
The deal still faces challenges. One Class-B shareholder has brought a lawsuit against the company already, alleging the deal does not compensate stakeholders like himself fairly. Other suits are possible, but Paramount is confident that it will prevail, and its merger with Skydance will eventually go through.
Outside of merger talks, the biggest story for Paramount+ during the quarter was an announcement that the company intended to raise prices for the streamer. Starting Aug. 20, Paramount+ will charge new customers $7.99 per month for ad-supported service, or $13.99 to go ad-free. Existing subscribers will see their price go up in September.
Paramount Plus
Paramount+ is a subscription video streaming service that includes on-demand access to 40,000+ TV show episodes from BET, CBS, Comedy Central, MTV, Nickelodeon, Nick Jr. and more. Get free access with a Walmart+ subscription.
Paramount+ includes “1883,” “Tulsa King,” “Star Trek: Discovery,” “SpongeBob SquarePants,” and “PAW Patrol.” Subscribers can watch the NFL, college football, The Masters, college basketball, UEFA Champions League, UEFA Europa, Serie A, and NWSL. The service also offers the option to watch your live CBS affiliate. The upgraded ad-free package includes premium movies and shows from Showtime.