Woe is linear.
On Thursday, Paramount announced that it’s writing down its cable TV business by $6 billion and laying off 15% of its US workforce as part of cost-cutting measures in advance of its planned merger with Skydance Media.
The layoffs, which include cuts to marketing and communications roles, will take place in the coming weeks.
Paramount Co-CEO Chris McCarthy dropped the news on the company’s Q2 earnings call on Thursday, noting that “these are difficult decisions to make” but “necessary to transform our organization for the future.”
A one-second pause – pour one out for the 15% – and McCarthy moved right along to an update on Paramount’s streaming business, which turned a profit for the first time last quarter since launching more than three years ago.
Streaming is finally profitable
Paramount’s direct-to-consumer (DTC) business, which includes Paramount+, Pluto TV and BET+, generated $26 million in profit in Q2 – up 13% – after losing $424 million in the year-ago quarter.
Streaming ad revenue in Q2 grew 16%, benefiting from an increase in viewing hours across Paramount+ and Pluto and from higher CPMs for TV media overall.
That said, “domestic advertising trends were negatively impacted by the fact that sports comprised a smaller share of inventory than it has in recent quarters,” said Paramount CFO Naveen Chopra.
This dynamic somewhat masked the fact that growth in nonsports domestic advertising improved from Q1. But on a total company basis, advertising declined 6% in Q2.
The return of live sports, however, together with new fall programming and a contribution from political spending, should create more linear inventory in the second half of the year.
On the DTC front, Chopra said Paramount expects another quarter of streaming growth in Q3.
$1 billion dinners
But what of the upfronts?
Although negotiations are still ongoing between some advertisers and broadcasters, Paramount didn’t participate in the traditional upfronts process.
Since 2023, Paramount has forgone the typical razzle-dazzle of upfronts season in favor of hosting a series of intimate dinners with buyers.
Which may have worked. This year, Paramount has secured more than $1 billion in ad commitments across its streaming portfolio.
“We’re pleased with our upfront results, particularly in the context of the evolution of the ad market and the scale of new entrants,” McCarthy said.
New entrants, eh.
That’s one way to say “Amazon Prime Video” without saying “Amazon Prime Video.”
