Paramount Cites Softer Economy for Cost-Cutting Plans, Ad Drop

Citing macroeconomic headwinds, Paramount Global is cutting costs and anticipating a Q3 decline in advertising revenue to continue in Q4. In a call with analysts Wednesday as the company announced Q3 financial results, CEO Bob Bakish and Chief Financial Officer Naveen Chopra said cost-cutting steps underway include reorganizing the Showtime networks, focusing marketing resources and spending on segments with high growth potential, and streamlining its ad sales. Bakish said Paramount+ added 4.6 million new subscribers in the quarter, for a total subscriber base of 46 million. He said year-over-year Paramount+ revenue was up 95%, and total sub base for its various direct-to-consumer services is close to 67 million. He said Paramount+ became available in Italy during the quarter, with Germany, Austria and Switzerland following later this year. Bakish said the Sky Showtime joint venture with Comcast launched during the quarter in Denmark, Finland, Norway and Sweden, and involving Paramount and NBCUniversal content is a route for going after smaller markets. Chopra said Paramount+ and Pluto TV combined had ad revenue growth of 4%, and would have done better if not for the economy. "Growth will reaccelerate" once the digital ad marketplace rebounds, he said. Chopra said Paramount expects "healthy" streaming subscriber growth in Q4 due to content and new market launches. He said it expects to exceed its full-year direct-to-consumer subscriber growth expectation of 75 million globally. Bakish said it would likely see in Q4 the same 2% overall decline in ad revenues it did in Q3. Revenue for the quarter was $6.92 billion, up 5% year over year. Paramount closed Wednesday at $16.79, down 12.42%.