The TV media division saw a revenue decrease of 8%, amounting to $4.57 billion, with a significant 14% decline in advertising revenue.
Media company Paramount Global, reported third-quarter revenue moderately above, Wall Street estimates on Thursday, as the substantial increase in streaming helped it overcome the impact of the Hollywood strikes and waning cable TV business.
Shares of the New York-based company surged 7.4% in trading after the bell.
The integration of Paramount+ with Showtime has helped the company boost its subscription numbers as well as advertising revenue from its streaming service.
According to Visible Alpha estimates, Paramount+ has added 2.7 million subscribers in the third quarter, beating analysts' estimates of 2.02 million additions.
Even though expenses in the streaming division surged by 23% to $1.93 billion, the company successfully reduced its adjusted operating loss to $238 million from $343 million in the previous year, partially attributable to the advantages derived from price increases.
The company indicated that streaming is expected to result in substantial earnings improvement in the coming year.
Streaming serves as the primary driver of revenue growth for the company; however, it continues to operate at a loss. This has necessitated a balancing act between pursuing growth and implementing cost controls within the streaming unit, as the highly profitable cable division is grappling with a significant decline in sales. The TV media division witnessed an 8% decrease in revenue, totaling $4.57 billion, primarily attributed to a 14% decline in advertising revenue, stemming from challenges in the global advertising market and reduced political advertising, as reported by Paramount.
The decrease also encompassed a decline in licensing revenue obtained from third-party sources. The strikes in Hollywood halted production, leading to a reduced availability of content for licensing.
For the quarter concluding on September 30, revenue reached $7.13 billion, slightly surpassing analysts' projected estimate of $7.10 billion, as per data from LSEG.
The filmed entertainment business saw a 14% increase in quarterly revenue, reaching $891 million, attributed to successful releases such as "Mission: Impossible - Dead Reckoning Part One" and "Teenage Mutant Ninja Turtles: Mutant Mayhem."
However, the filmed entertainment group reported an operating loss of $49 million, primarily due to the timing of theatrical releases and the expenses associated with production shutdowns caused by strikes.