Paramount’s big bet on streaming, from subscription services like Paramount Plus to its free ad-supported Pluto TV, continues to be a drag on the company.
The media giant’s direct-to-consumer business posted a second-quarter operating loss of $424 million, bringing the company’s overall finances into the red.
That’s despite the company crowing about subscription revenue growing by 47% and advertising revenue from streaming growing by 21%. Paramount Plus added 1 million subscribers to bring its total to 61 million.
The results underscore the long road Paramount has if it wants to stay in the increasingly brutal streaming wars — which have most of the major companies retreating with layoffs and budget cuts. Paramount was never considered one of the big players — established incumbents Netflix or high-profile upstarts like Disney Plus — but it had been in the game longer and with a steadier presence.
Paramount Plus had hinged much of its early success on Star Trek, and has a hit with its flagship series, Strange New Worlds, while Pluto has grown rapidly as more cord cutters are looking at free ad-supported options as they get away from an excess of subscriptions.
“In the second quarter, we maintained our focus on scaling our streaming platforms, maximizing our traditional business, and building a sustainable business model that will return the company to significant earnings growth in 2024,” Paramount CEO Bob Bakish said in a statement.
In total, the company swung to a second-quarter loss of $299 million, or 48 cents a share, from a year-ago profit of $419 million, or 62 cents a share. Revenue slipped 2% to $7.6 billion.
Analysts, on average, forecasted a breakeven quarter on revenue of $7.4 billion, according to Yahoo Finance.