Paramount's DTC Ad revenue jumps 9% in Q4, Offsetting Linear TV declines

Paramount Global has released its fourth quarter and full-year 2024 earnings, revealing a year of significant transition and a focus on its streaming-first strategy. While overall revenue saw a slight decline for the year, the company's direct-to-consumer (DTC) segment, particularly Paramount+, showed substantial growth, signaling a potential turning point for the media giant. Notably, the report also detailed mixed performance in advertising revenue across its various segments.

Key Highlights:

Streaming Surge: Paramount+ added 10 million subscribers in 2024, reaching 77.5 million total, and saw a 33% increase in revenue. The platform achieved record engagement in Q4, ranking as the #2 domestic SVOD service for original series viewership.
DTC Advertising Growth: DTC advertising revenue rose 9% in Q4, reflecting growth from Paramount+ and Pluto TV, including higher political advertising.
TV Media Advertising Decline: TV Media advertising revenue decreased 4%, reflecting declines in the linear advertising market and fewer sporting events on CBS, partially offset by higher political advertising.
Overall Revenue: Total company revenue grew 5% in Q4, but declined 1% for the full year, reaching $29.213 billion.
TV Media Challenges: The TV Media segment experienced a 4% revenue decline in Q4 and a 7% decline for the full year, reflecting challenges in the linear advertising market and subscriber declines.
Filmed Entertainment Boost: The Filmed Entertainment segment saw a 67% revenue increase in Q4, driven by strong theatrical releases like "Sonic the Hedgehog 3" and "Gladiator II".
Significant Losses: Paramount reported a GAAP operating loss of $5.269 billion for the full year, primarily due to a $5.98 billion goodwill impairment charge related to its Cable Networks.
Skydance Transactions: Paramount announced that the Skydance transactions are expected to close in the first half of 2025, pending regulatory approvals.
Cost Savings: Paramount achieved its targeted annual run-rate cost savings of $500 million.

Advertising Revenue Dynamics:

The earnings report highlighted the contrasting trends in advertising revenue. While the DTC segment experienced growth, driven by digital platforms, the TV Media segment faced headwinds due to the ongoing shift away from linear television. This reflects the broader industry challenges and Paramount's strategic focus on its streaming services.

GEORGE CHEEKS, CHRIS MCCARTHY & BRIAN ROBBINS, CO-CEOS said "We are proud of the transformative year we delivered since becoming Co-CEOs, which marks a significant turning point for Paramount as we shift into a streaming-first company. DTC profitability improved $1.2 billion in 2024, driven by an impressive year at Paramount+, where we added 10 million new subscribers and delivered a 33% increase in revenue, which gives us great confidence Paramount+ will achieve full year domestic profitability for 2025. In Q4, Paramount+ saw the highest level of engagement yet and achieved a new record, ranking as the #2 domestic SVOD service for hours watched across all Original Series. These remarkable achievements would not have been possible without the hard work of our talented teams and creative partners for whom we are deeply appreciative."

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