Just as NBCUniversal noted the day before, CEO and president of Paramount Global Bob Bakish says the fourth-quarter scatter market is coming in weaker than expected.
“We do now see the fourth quarter coming in a bit below the third quarter,” said Bakish, speaking at the UBS investor conference. This is lower than earlier company projections." He added: “In our third quarter call we talked about our fourth-quarter performance being in line with the third quarter.”
Bakish says the company “had looked for some improvement in certain sectors, but has not seen that. He did not provide details in terms of specific sectors.
Much of the decline is attributable to a weaker ad economy, but the results have also been impacted by the international financial situation -- “by what's going on in the FX [foreign exchange], on the exchange rate side.”
Still, he says, advertising is a great business to be in -- especially for its direct-to-consumer (D2C) businesses.
“We included advertising in Paramount+ for two reasons initially,” he said. “One, we wanted to get the widest possible TAM [Total Addressable Market]. So we wanted to provide that lower cost [consumer] option. And two, it is significant incremental money.”
Paramount Global, through its EyeQ ad platform, does packaged deals with advertisers consisting of Paramount+, its high-profile premium streaming platform, and Pluto TV, its free, ad-supported service.
The two are sold via the company’s EyeQ, the unified ad-supported streaming unit.
“The 'so what' of all that is, on a CPM
[cost-per-thousand viewer] basis, it is a value proposition in the market,” Bakish said. “It's probably [priced in] mid high-teen versus. Some other [competitors' streaming platforms] are
going out at $50 to $60 [CPMs]. That is very intentional on our part. We want to build a big business. We don’t just want to cream the top.”
Bakish says EyeQ, which represents Paramount's D2C advertising revenues, had a 4% growth rate in the third quarter. While the business is still growing, he said, this is “clearly a deceleration from where it was, but that will -- that ship will right itself.”
The Pluto TV ad business is now generating over $1 billion in revenue per year.