Paramount Global Sees 2022 Streaming Losses Hit $1.8 Billion – Deadline
Paramount Global chief financial officer Naveen Chopra said streaming losses will total about $1.8 billion this year, which is above Wall Street expectations but still within the company’s target. maximum DTC losses in 2023.
The company lost $901 million in the first half of this year. Chopra anticipated the same in the second half given a choppy advertising market. Adjusted OIBDA — a measure of operating profit — was negative $445 million for the second quarter ended June.
“We just have to let it play a bit and manage some economic headwinds,” he said on a call after the first quarter results. Analysts searched but did not get a timeline to break even/break even after 2023.
The stock fell 4% earlier in the day as investors generally spooked by streaming spending and earnings visibility across the industry. He regained ground, just falling his hair out late in the morning.
Chopra also reiterated the company’s $6 billion spending target through 2024, but stressed that content is leveraged across all platforms.
“When it comes to content spend, the most important thing to remember is that when we think about our investment in content, we always look at it in terms of the growth and the return it unlocks.” With streaming revenue and subscriber numbers growing, “our investment in content is working,” he said. “We don’t want to sacrifice a long-term opportunity.”
A choppy advertising market has now become a variable. Automotive advertising continues to be squeezed by supply chain issues as the packaged goods sector, managing inflation, turns off the tap. But travel and technology are strong. pharmaceuticals are coming back and everyone is talking about big medium-term political spending.
CEO Bob Bakish said Paramount is using the current headwinds to increase promotion of internal assets, particularly Paramount+, to increase its visibility with consumers. Paramount Global had a solid start and it didn’t seem too worried. Chopra reassured the street that once the advertising market stabilizes, he believes the former television media group can generate stable growth in advertising and affiliate revenue.
Bakish said he’s confident Paramount+, which has an advertising tier, can hold its own as Netflix and Disney+ prepare to roll out their own ad-supported versions. “Competition is nothing new. [and] our competitive position in the advertising market is very strong,” he said. “We have a great diversity [content] in entertainment, sports and news, and our content has been created and formatted with advertising in mind. »
Asked about the possibility of a Paramount+ price increase, CFO Chopra said there were no immediate plans but “they will happen in the future” taking into account the type of packages offered and the value proposition in relation to the main services. “We continue to look at pricing, how we optimize tiering.”