Paramount Global’s quarterly revenue on Wednesday fell short of Wall Street expectations, weighed down by intense competition from streaming rivals and a weak advertising market.
The company’s shares fell nearly 2% in trading after the bell.
The media industry is grappling with changing landscapes, including streaming’s growing dominance over traditional television and the impact of last year’s Hollywood strikes.
A weak advertising market and economic uncertainty are adding to the pressure.
The media conglomerate reported fourth-quarter total revenue of $7.64 billion, below analysts’ expectations of $7.85 billion, according to LSEG data.
CEO Bob Bakish said, “We expect to achieve profitability for domestic Paramount+ in 2025.”
Paramount+, the company’s flagship streaming platform, added 4.1 million subscribers in the quarter, compared to 2.7 million in the previous quarter. This number was slightly higher than the estimated 4.03 million new subscribers, according to data from Visible Alpha.
The company has been pouring money into its fast-growing but unprofitable streaming arm, Paramount+, and announced in November that the investment had peaked a year ahead of target.
The results come as the U.S. entertainment industry undergoes a new round of consolidation. In January, Reuters reported, citing people familiar with the matter, that Skydance Media CEO David Ellison was considering an all-cash acquisition of National Amusements, the parent company of entertainment company Paramount Global. It was reported that there was.
CNBC reported Tuesday that Warner Bros. Discovery is no longer pursuing a merger with Paramount Global, calling off months of negotiations to merge the media companies.
Paramount reported a surprise profit of 4 cents per share, compared to analysts expecting a loss of 1 cent.
Revenue from the company’s direct-to-consumer division, which includes streaming platforms Paramount+ and PlutoTV, rose 34% in the quarter. Revenue from the movie entertainment business decreased 31%.
The studio is home to film series such as “Top Gun” and “Mission: Impossible,” as well as the hit TV show “Yellowstone.”
TV media sales fell 12% year-on-year, and advertising revenue fell 15%, affected by a decline in political advertising and Hollywood’s twin strikes.
