Paramount says Q4 D2C losses to be similar to year-ago levels

CFO Naveen Chopra stated: “Looking ahead, we expect strong D2C revenue growth with another quarter of healthy sub growth. That said, Q4 D2C losses will be similar to the year ago period. This reflects higher sports costs as well as higher marketing costs to support our broader geographic footprint as most of our Western European launches occurred late in the fourth quarter of 2022. Nonetheless, as I noted earlier, we now expect full year D2C losses in 2023 to be lower than 2022. And meaning we are ahead of plan in moving the D2C business toward profitability. The ongoing execution of our streaming strategy will yield further improvement in 2024 as we continue to drive subscriber growth user engagement and Paramount+ global ARPU growth in excess of 20%… Looking ahead to Q4, advertising growth will continue to be impacted by a sizable decline in political advertising. We’re seeing modest improvement in domestic linear advertising, but we continue to deal with strike impact and international weakness, which will limit improvement in the year-over-year trend. Shifting gears a bit, I’d like to provide additional detail regarding the financial impact of the strikes. In Q3, total company OIBDA included nearly $60 million of strike-related idle costs. These are incremental expenses incurred to retain production capabilities while the strike is ongoing. These costs impacted both our TV media and filmed entertainment segments. We expect to incur additional strike-related idle costs in Q4.”