The news: Media giant Paramount Global is undergoing a “restructuring and streamlining” of its top-heavy management while simultaneously laying off several dozen staffers this week.
- Longtime CBS executives Kelly Kahl (president of CBS Entertainment) and Thom Sherman (senior EVP of programming) are out. This follows Chairman and CEO of Showtime David Nevins’s departure last month and president of Paramount Advertising Jo Ann Ross retiring the month prior. For the most part, their responsibilities will move to existing executives, as no outside leaders have been brought in to date.
- Less than 100 employees are expected to be let go, largely from the ad sales staff in New York and Los Angele
Paramount's mix of broadcast, free ad-supported streaming (FAST), subscriber video on demand (SVOD), and cable puts the company—whose brands include CBS, BET, Comedy Central, Pluto TV, Paramount Pictures, Smithsonian Channel, and Nickelodeon—“in a very powerful position" to weather the market, finance chief Naveen Chopra said at RBC’s media conference this week.
How we got here: Earlier this month, the company announced a 5% rise in third-quarter revenues, but the figures fell short of projections due to cord-cutting and a decline in ad revenues.
- The TV media sector, which includes cable networks MTV, Nickelodeon, Comedy Central, Showtime, and the broadcast network CBS, saw revenues fall 5% to around $4.9 billion from Q2.
- TV networks' advertising revenues fell 3% to around $1.9 billion, indicating the onset of macroeconomic headwinds.
The Paramount+ imperative: It’s clear that the company’s flagship streaming service will be critical to its fortune in quarters to come as cable and broadcast TV continue to lose consumers.
- In Q3, Paramount+ upped its subscriber count 4.6 million, bringing the total to 46 million.
- Sports, particularly the NFL and international soccer, as well as the launch of its collaboration with Walmart+, drove that subscriber growth.
- Even so, Paramount+ is losing the head-to-head with its closest competitor, Peacock. By 2024, we forecast Peacock will achieve $1.3 billion in advertising revenue in the US. That same year, Paramount+ will only reach $647.4 million, according to our forecast.