Paramount+ gains 1.5m subs in Q1 as D2C business moves closer to breaking even

Paramount+ added 1.5 million subscribers in the first quarter (Q1) to reach 79 million globally, as parent company Paramount Global said it still expects its long-simmering merger with Skydance to close in the first half of 2025.

Landman

Overall, company revenue declined 6% to US$7.19bn in Q1, with TV media down 13% to US$4.34bn, direct-to-consumer (D2C) up 9% to US$2.04bn and filmed entertainment up 4% to US$627m. Across the company, adjusted earnings were US$688m, down 30% from US$987m a year ago.

In the D2C segment, which includes Paramount+, Pluto TV and BET+, the company continued to move closer to breaking even, posting a loss of US$109m in Q1 versus a loss of US$286m a year ago. Subscription revenue grew 16% to US$1.57bn while advertising revenue was down 9% to US$473m. Execs said Paramount+ remains on course to be profitable in the US in fiscal 2025.

Paramount Global highlighted Landman, 1923, Yellowjackets and Mobland as key viewership drivers for Paramount+. In the quarter, AVoD platform Pluto TV also delivered its highest consumption in terms of total hours, both in the US and internationally, according to Paramount.

The 13% revenue decline in its TV media segment was driven by lower advertising, which fell 21% to US$2.04bn, while affiliate and subscription revenue was down 9% to US$1.83bn and licensing was up 4% to US$674m. TV media, which includes US broadcaster CBS and Paramount’s portfolio of cable channels, saw adjusted earnings fall to US$922m in Q1 versus US$1.45bn a year ago – a 36% drop.

In the press release announcing its Q1 results, Paramount said it still anticipates its US$8bn merger with Skydance will close in the first half of the year. The deal is currently being reviewed by the Federal Communications Commission (FCC) because it involves the transfer of CBS’s broadcast licenses.

However, the review is being held up, with the Wall Street Journal reporting two weeks ago that one of the potential remedies to gain FCC approval would be a commitment that Paramount will cease all diversity, equity and inclusion (DEI) initiatives, which have become a bone of contention for Donald Trump-appointed FCC chairman Brendan Carr and the Trump administration.

This week, Sarah Rose, president of 5 and UK regional lead for Paramount, said the UK broadcaster was holding firm on its commitment to DEI in its shows, workforce and principles.

“We’re not doing anything differently. We have a ‘no diversity, no commission’ policy. There’s no commission from 5 that doesn’t have a diverse component to it. That hasn’t changed,” said Rose. “Our employee resource groups are very active at Paramount. That’s not changing. There are clearly much darker forces around us in the world at large but, day to day, it is critical that we maintain exactly what we’ve always done, and that’s what we’re doing.”

At the same time as the FCC review, Trump is personally suing Paramount-owned CBS News over an allegation the news outlet favourably edited an interview question directed at Kamala Harris in the run-up to the US election last year.

It is widely believed Carr will not approve the Skydance-Paramount merger until CBS News has agreed to settle its legal dispute with Trump – a situation that has angered CBS News staffers and recently led to the departure of Bill Owens, executive producer of news programme 60 Minutes, who quit citing a loss of editorial autonomy.

Earlier this week, Carr claimed his review of the Skydance-Paramount deal has no connection at all to Trump’s lawsuit against CBS News.

If and when the merger is approved, it is expected to unlock a significant amount of new content investment.