CBS Network owner Paramount Pictures (PARA.O) missed Wall Street quarterly revenue estimates on Thursday. This is due to a wider advertising market slump. Even though its streaming platform gained millions of subscribers.
Media shares fell 8% before the opening bell. Stock prices rose 45% from 2023 to Wednesday’s close.
Businesses have cut their advertising budgets due to inflation, rising borrowing costs, falling consumer demand across product categories, and geopolitical unrest.
Despite a boost from political advertising after the 2018 US midterm elections, TV advertising revenue fell 7% in the three months ending in December.
The streaming release of “Top Gun: Maverick” helped Paramount+ add a record 9.9 million subscribers, protecting the company from cord-cutting.
Showtime, home to “Billions,” “Yellowjackets,” and “Dexter,” will merge with Paramount+ across platforms later this year, the company announced last month.
According to Refinitiv, quarterly revenue rose 2% to $8.13 billion. Although analysts expected $8.16 billion.
Paramount+ and PlutoTV’s direct-to-consumer division lost $575 million, up from $502 million.
Investors are interested in the service because the company plans to heavily invest in content to compete.
Due to their content and platform strategy, CEO Bob Bakish expects profit growth in 2024.
Paramount is reselling Simon & Schuster after months of negotiations with Penguin Random House.
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