There’s no secret in the fact that the streaming market has floundered a little this year. Still, it was rather surprising to see Paramount forecast a rather harsh set of streaming losses for this year. Entertainment attorney Brandon Blake, of Blake & Wang P.A, dives deeper into the statement.
Sluggish Q2 Reports
With around 64M global streaming subscribers to its service, Paramount have reiterated their goal of spending $6B on content creation for the 2024 period. While only a small improvement on the 62M subs last quarter, it’s still progress. 2022 streaming losses are now estimated to fall into the $1.8B range, slightly higher than the original $1.5B predicted. It has also indicated that it expects these losses to peak in 2023, not this year. However, they continue to remain optimistic about their streaming efforts overall, pointing to rising streaming revenue and steady, if slow, subscriber growth. Their overall earnings for Q2 actually managed to exceed expectations, but the EBITDA is still more modest than expected. Cash flow for 2023 is expected to hit close to breakeven.
Wall Street Lacks Consensus
Wall Street seems a little torn on Paramount overall currently. While some have become more cautious, worried about its reliance on advertising revenue, others have chosen to take a more contrarian outlook.
It certainly seems likely that Q3 advertising spend will be flat, if not actively trending down, in the current economic environment. Hopes are still pinned on Q4 this year, when political advertising and other seasonal events are likely to drive it higher. Free cash flow remains a worry for investors.
Overall, Paramount managed to deliver a more positive Q2 earnings call then many others, despite the valid points of worry around the larger economic outlook for the remainder of the year. Investors certainly reacted more favorably than they have to many others, with Paramount managing a small rise in stock price- one of the few entertainment entities to do so this quarter.
Film and Television 