With two Big 5 publishers now embracing AI for audio, and others ready to follow, a flood of new content will simultaneously offer consumers more choice at better prices while also competing for listening hours. Embracing subscription as an outlet for this new content is just common sense.
Paramount Global has reported a streaming profit of $49 million for the third quarter, marking a significant turnaround from a loss of $238 million the previous year. This is the second consecutive quarter of profitability for the Hollywood giant’s direct-to-consumer (DTC) segment, driven by gains in both subscribers and revenue.
Subscriber Growth and Revenue Increase
Paramount+ added 3.5 million subscribers in the third quarter, bringing the total to around 72 million. This growth stemmed from both international deals and a new multi-year distribution agreement with Charter Communications in the US. The DTC segment’s revenue rose by 10% to $1.86 billion, with advertising revenue up 18% and subscriber revenue increasing by 7%.
Future Prospects
Despite the current quarter’s profitability, CFO Naveen Chopra forecasts a potential loss for the streaming business in the fourth quarter due to content and marketing expenditures. However, Paramount expects its streaming platform, Paramount+, to achieve domestic profitability by 2025.
Impact on Publishing
For professionals in the publishing industry, Paramount’s success in the streaming sector offers valuable insights. The parallels between streaming media and digital book streaming are significant. Just as Paramount has leveraged strategic partnerships and new content to drive subscriber growth, publishers should be looking to explore similar strategies to expand their digital offerings and reach a broader audience.
Challenges and Strategic Moves
Paramount’s focus on cost reduction and strategic partnerships continues as it transforms its streaming business. The company is evaluating potential partnerships and asset sales, including the sale of its stake in Indian media company Viacom18. These moves are aimed at creating long-term value for the business and its shareholders.
The Boring Bit
Paramount’s total third-quarter revenue declined by 6% to $6.73 billion, while operating income fell by 46% to $337 million. However, adjusted operating income before depreciation and amortization (OIBDA) rose by 20% to $858 million, reflecting the company’s ongoing efforts to streamline operations and reduce costs.
Industry Implications
The company’s results underscore the importance of adapting to changing market dynamics and leveraging digital platforms to drive growth. For publishing professionals, this serves as a reminder of the potential for digital transformation and the opportunities that exist in the continuously evolving media landscape.
Paramount’s continued success in the streaming sector is a testament to the effectiveness of strategic investments in digital content and distribution., and provides valuable guidance for publishing professionals looking to navigate the digital and AI age.
The latter being especially pertinent. With two Big 5 publishers now embracing AI for audio, and others ready to follow, a flood of new content will simultaneously offer consumers more choice at better prices while also competing for listening hours.
Embracing subscription as an outlet for this new content is just common sense.
This post first appeared in the TNPS LinkedIn newsletter.
