Paramount+ kept hiking up the streaming mountain in the second quarter as some rivals have stumbled.
In announcing Q2 earnings, Paramount Global said its flagship Paramount+ service now has 43.3 million paid customers, a net add of 3.7 million for the June quarter (including 1.2 million disconnects in Russia).
Excluding Paramount+, however, the company’s other streaming services declined in aggregate when factoring in losses from Paramount’s shutting down business in Russia following the invasion of Ukraine.
Total streaming subscribers globally reached 63.7 million in the second quarter, a gain of 1.7 million. Backing out Paramount+, the company’s other OTT services dropped 2.4 million subs overall. Paramount does not break out the number of subscribers for Showtime or its other direct-to-consumer services, which include BET+ and Noggin.
The total companywide streaming figure included the removal of 3.9 million Russia subscribers, including the 1.2 million Paramount+ accounts.
The pickup for Paramount+ comes as growth for other streamers has been flat or down. Netflix shed nearly 1 million subs in Q2 (though that was fewer than expected), while paid customers for NBCUniversal’s Peacock was flat for the period at 13 million and Peacock’s overall active accounts dropped by 1 million. Warner Bros. Discovery, which owns HBO Max and Discovery+, reports Q2 earnings Thursday after market close, and Disney is set to release results Aug. 10.
Paramount took streaming market share in Q2, CEO Bob Bakish said in prepared remarks. “Our deep and growing library of valuable IP, coupled with the strength of our best-in-class assets, ensures we are well-positioned to continue to maximize value for our shareholders,” he said.
By the end of 2022, Paramount’s subscription VOD services will be in 60 total markets, Bakish said on the earnings call, noting recent launches of Paramount+ with Sky in the U.K. and Ireland and CJ ENM in South Korea.
Revenue for Paramount+ more than doubled, to $672 million in Q2, and overall direct-to-consumer revenue rose 56%, to $1.19 billion. But operating losses for the company’s DTC segment more than tripled, to $445 million in the June quarter, reflecting investments in content and international expansion — cutting into Paramount’s bottom line. On the Q2 call, CFO Naveen Chopra said adjusted operating loss for DTC in the second half of 2022 will be roughly the same as the first six months of the year (which totaled $901 million).
In Q2, Pluto TV — Paramount’s free, ad-supported streaming service — continued to pull in viewers, but at a more moderate pace than in recent quarters. Pluto TV counted 69.6 million monthly active users in the quarter, up from 67.5 million in Q1 (and 52.3 million in the year-earlier period). Revenue for Pluto TV grew 10% in the most recent quarter, to $265 million; Bakish acknowledged that Pluto TV’s ad sales have been impacted by “the macroeconomic situation.”
Amid the fiercely competitive streaming wars, Paramount has assumed an aggressive posture. In February, the company (formerly known as ViacomCBS) raised its global streaming subscriber target for 2024 from from 65 million-75 million subs to more than 100 million. At the same time, it plans to boost spending on streaming content to more than $6 billion by 2024, versus $4 billion previously — fueling investor concerns over rising costs that will eat into profitability.
Chopra reiterated the company’s 100 million-plus target for total streaming subscribers by 2024 and Paramount’s expectation that DTC losses would peak in 2023.
Paramount+ is stocked with entertainment, live sports and news from the company’s networks including CBS, BET, Comedy Central, Nickelodeon and MTV. The lineup includes original series like Taylor Sheridan’s “1883,” “Star Trek: Strange New Worlds” and “Halo,” unscripted shows like “RuPaul’s Drag Race All Stars”; and movies like “Sonic the Hedgehog 2,” “PAW Patrol: The Movie,” “A Quiet Place Part II” and “The Lost City.” The service is available in two flavors: The ad-supported Essential Plan ($4.99 monthly) and the ad-free Premium Plan ($9.99 monthly).
Pictured above: Paramount Pictures’ “Sonic the Hedgehog 2”