By Gary Symons
TLL Editor in Chief
The meteoric rise of streaming services during the pandemic has prompted ViacomCBS to change its name to Paramount.
That news was releases during the ViacomCBS earnings call with investors this week, which also revealed the company’s Paramount+ service has attracted 32.8 million subscribers. That includes 7.3 million subscribers who signed on to the service in Q4.
When you add in the subscribers for the company’s other streaming options, like Showtime OTT, the total number of streaming customers rises to 54 million, with a 9.4 million combined increase in streaming customers for the quarter.
CEO Bob Bakish said the rapid rise in streaming revenue made a rebranding to Paramount the obvious choice.
“For more than two decades now, I’ve witnessed the power of Paramount and all it represents,” Bakish said during the investor call. “I’ve seen, for example, the global impact of Paramount’s gripping films like The Mission Impossible franchise, which sold out time and time again in theaters all around the world. I’ve seen during my international years, how the Paramount channel quickly became among our biggest branded networks in the markets outside the United States. And I’ve seen more recently, the audience expanding impact of Spike being rebranded as the Paramount network in the U.S., thanks to movies and mega hits like Yellowstone and more.
And now, I think we all see more and more every day, the incredible momentum of Paramount+, our flagship streaming service. Our momentum is building, and as it grows, as we take Paramount+ and our other streaming businesses to the next level, the size of the opportunity we see ahead is matched only by the scale of our ambition to seize it.”
Bakish said Paramount has reached its initial goals for streaming customers earlier than expected, and that has the company focused on that sector as its primary means of growth in the coming years.
“We can’t talk about our momentum without talking about streaming,” Bakish said. “Just look at the facts. On our paid streaming platforms, we just wrapped our best quarter ever for new subscribers.
“When it comes to realizing our streaming goals, we’re moving fast and gaining even more speed,” he added. “Already, we are one full year ahead of schedule, posting subscriber results we didn’t expect to see until next January and by the end of 2022, we’re on track to hit our 2024 subscriber goal, two full years ahead of schedule.”
ViacomCBS also announced its popular Showtime Originals segment will be offered to Paramount+ customers for an additional fee.
CFO Naveen Chopra indicated the company appears to have room for upward growth in terms of its revenue per customer, in addition to attracting more customers. He said the average revenue per user for Paramount+ was around $9 during Q4, which compares to $14.78 for Netflix in the U.S./Canada, $6.68 for Disney+, $87.01 for Hulu with the live TV subscription tier and $11.15 for HBO and HBO Max domestically.
The news wasn’t all good for ViacomCBS, however, as investors initially punished the company as it missed Wall Street forecasts for earnings per share in this quarter. Analysts had expected earnings of 43 cents, but they came in at 26 cents on an adjusted, diluted basis compared with $1.04 in the year-earlier quarter. Investors sent the shares tumbling by 4% in after hours trading, but within the company the management team seems to be unfazed, seeing the rise in streaming and overall revenue as more important factors.
ViacomCBS hit $8 billion in revenues in Q4, which easily outstripped analyst estimates of $7.5 billion by 16%. As Bakish indicated in the earnings call, streaming dominated in terms of company growth, soaring 48% to $1.3 billion. The bad news came primarily from the company’s advertising revenues, which remained flat at $2.6 billion, an increase of only 1%.
For ViacomCBS management, however, the feeling is that the long view for the company looks much stronger this year due to the faster than expected adoption of its streaming services, and that has inspired its major rebranding to the legendary Paramount name and brand.