• by Wayne Friedman , 5 hours ago

In the midst of its high-profile battle to win a deal to acquire Warner Bros. Discovery, Paramount Skydance continues to suffer when it comes to core advertising revenues at its key platforms.

Total core advertising revenues were 4% lower to $3.8 billion, according to Madison and Wall’s Brian Wieser -- but declined 9% overall (including political advertising) on a pro-forma basis.

Its linear TV networks and stations dropped 10% in advertising revenue year-over-year to $2.95 billion -- down 3% in core advertising (ex-political). 

Direct-to-consumer (D2C) streaming advertising results -- Paramount+, Pluto TV and BET+ --  slipped 4% to $853 million. 

Wieser says Pluto TV sank 16% on its own, largely due to “under-investment in content and monetization,” resulting from the maturing streaming business.

Paramount’s other major revenue stream -- affiliate fees and subscription fees -- was down 2.9% to $5.4 billion.

Looking only at TV media’s affiliate revenue, those distribution fees were down 7% to $2.8 billion.

In a more positive trend, direct-to-consumer (D2C) streaming fees (including Paramount+) were up 16%. Subscribers climbed 4% to 78.9 million.

One key declining financial measure showed that fourth-quarter content costs for TV Media and its streaming business were down 8.5%. TV Media content costs were $3.5 billion; streaming, $1.8 billion. That is a concern, says Wieser.

“To the extent that industry spending on content is generally up year-over-year and there is a direct relationship between share of spend on content and share of ad revenue, under-performance on ad sales should be unsurprising.”

Paramount expects growth in D2C advertising during the rest of the year, with moderate TV media advertising declines.