Towards the end of last week, one of the most bullish investors in video streaming, Paramount Global said its parent company raked in more subscribers than it was anticipated for its streaming service, Paramount+. In the first quarter, Paramount+ had 60 million subscribers at the end of March, 4.1 million more than it did at the end of 2022, the company reported in its earnings call Thursday.
Also, Revenues for the service increased 65% year over year, due to both increased subscriber growth and, to a lesser extent, an increase in ad revenue. Pluto TV, meanwhile, ended the quarter with 80 million monthly active users, execs said. On the top line, the company’s direct-to-consumer streaming business reported quarterly revenue of $1.5 billion, a 39% increase year over year. However, on the bottom line, Paramount+ and free streamer Pluto TV, reported a $511 million loss, a 12% year-over-year increase.
While Paramount+ could be showing signs of topline progress for a player up against Disney+ and the industry’s frontline, Netflix, there are signs that some other players are not smiling all through the quarter. Similarly, newer players such as Peacock have also reported widening losses as they invest in programming that will attract subscribers and advertisers.
One thing is certain while streaming giants and newcomers seek to compete with content and exclusive programming to attract and retain subscribers, the subscription revenue alone cannot yield enough revenue to break even nor sustain the business. Recently, Netflix launched Basic with Ads, a bouquet that inserts ads into the streamer’s content, the service now has at least 1 million monthly active users in March according to data compiled by Bloomberg.
In essence, advertising will continue to play a major role in content monetization and sustenance whether via streaming or traditional models.