Summary of Paramount Global Conference Call Company Overview - Company: Paramount Global (NASDAQ: PARA) - Date: June 14, 2022 - Participants: Robert Bakish (CEO), Douglas Mitchelson (Credit Suisse Analyst) Key Points Industry Positioning - Paramount Global is uniquely positioned as a major media company with a diverse portfolio that includes broadcast, cable, paid streaming, free streaming, and theatrical offerings [3][5] - The company has momentum across all segments, with a strong TV Media segment that includes the number one broadcast network and a leading cable network portfolio [3][4] Streaming Strategy - Paramount is guiding to over $6 billion in content spending for streaming in 2024, reflecting a more aggressive investment posture [6][9] - The streaming strategy focuses on content that works across multiple platforms, enhancing ROI and driving subscriber growth [7][8] - Revenue from direct-to-consumer (D2C) is projected to grow from slightly over $3 billion in 2021 to over $9 billion in 2024 [9] Content Development - Paramount has shifted towards in-house content production, focusing on quality and diversity to differentiate from competitors [10][11] - The company has had significant success in theatrical releases, with five films opening at number one in the box office in 2022, including "Top Gun: Maverick" [11][17] - Paramount is leveraging franchises like "Sonic," "Star Trek," and "South Park" to drive content engagement and subscriber growth [14][19] Financial Performance - Total content investment was approximately $15 billion in 2021, with expectations for continued growth, albeit at a moderated rate due to strategic remixing of expenses [22][23] - The linear network business remains a powerful financial engine, generating about $6 billion of OIBDA in TV Media [59] Market Challenges and Opportunities - Inflation and economic headwinds are acknowledged, but the diversified business model is seen as a relative advantage during such periods [26][27] - Advertising revenue is experiencing mixed visibility, with some categories performing well, particularly in travel and political advertising [29][30] Subscriber Growth and Engagement - Paramount+ added 21 million subscribers in 2021 and continued to see growth in 2022, with expectations to exceed 75 million total global D2C subscribers by year-end [36][41] - The platform ranked second in customer satisfaction among streamers, driven by a broad content offering and multi-platform programming expertise [38] Global Expansion - Paramount is expanding its international footprint with launches in key markets like South Korea, the UK, and India, leveraging local partnerships to enhance content offerings without significant investment [50][51] Future Outlook - The company expects to reach peak losses in its D2C business by 2023, with a focus on building a sustainable and profitable streaming model [44][46] - Paramount's diversified media business is projected to create significant value over time, with strong momentum across all segments [63] Additional Insights - The company is increasingly leaning into global production capabilities to enhance content diversity and manage costs effectively [24] - Paramount is actively converting third-party content deals from variable to fixed fee arrangements to improve margins [55][56] This summary encapsulates the key insights and strategic directions discussed during the conference call, highlighting Paramount Global's robust positioning in the media landscape and its proactive approach to navigating market challenges.
Paramount Global (PARA) CEO Robert Bakish Presents at Credit Suisse Communications Conference (Transcript)