Paramount (US:PARA)2021-09-14 18:59Financial Data and Key Metrics Changes - The company expects streaming revenue to account for approximately 15% of total revenue this year, with significant growth anticipated for the following year [19] - Streaming content expenses are projected to exceed $5 billion by 2024, compared to about $1 billion in 2020, indicating a substantial increase in investment in this area [19][20] Business Line Data and Key Metrics Changes - Paramount+ has seen strong engagement in various content genres, particularly in kids programming and sports, which have driven subscriber acquisition [15][16] - The company is focusing on a broad content strategy for Paramount+, differentiating itself from competitors by including sports, news, unscripted content, and kids programming [14][15] Market Data and Key Metrics Changes - The company has reported a significant increase in viewership for NFL content on its streaming platforms, indicating strong performance in sports programming [15] - Pluto TV has surpassed $1 billion in revenue this year, a substantial increase from under $100 million just two to three years ago, showcasing its rapid growth [45] Company Strategy and Development Direction - The company is undergoing a strategic shift towards streaming, viewing it as a net addition to the business rather than a replacement for linear networks [23][25] - The company is actively pursuing global expansion of its streaming presence through various partnership models, including commercial deals and joint ventures [27][30] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the dynamic nature of the theatrical environment and is making case-by-case decisions regarding film releases to maximize asset value [12] - The company is optimistic about the future of streaming, believing it will offset declines in linear affiliate revenue and enhance overall financial performance [23][25] Other Important Information - The company is divesting non-core assets to fund streaming growth and return capital to shareholders, indicating a focus on strengthening its balance sheet [55] - The company has launched an ad-supported tier for Paramount+, which has performed well and is expected to narrow the ARPU gap between subscription tiers over time [41][42] Q&A Session All Questions and Answers Question: Rationale behind leadership changes at Paramount Studios - Management believes the new leadership will bring creative and strategic insights necessary to navigate industry changes and enhance content offerings [3][4] Question: Impact of shrinking theatrical windows on film value - Management asserts that movies remain a critical storytelling medium and that more distribution options today can enhance their value [7][8] Question: Content engagement on Paramount+ - Management highlights strong performance in kids content and sports, indicating a successful strategy to attract diverse audiences [15][16] Question: Future of D2C offerings - Management views streaming as a net addition to the business, with significant long-term upside in unit economics compared to linear networks [23][25] Question: Strategic rationale for recent deals with Sky/Comcast - Management explains that the deals are aimed at achieving rapid global expansion of streaming presence, tailored to the specific market dynamics [27][30] Question: Integration of Showtime and Paramount+ - Management confirms ongoing efforts to create a streaming ecosystem that leverages both services to maximize customer engagement and value [37][40] Question: Performance of the ad-supported tier - Management reports that the ad-supported tier has met expectations, with economics between tiers not differing as much as anticipated [41][42] Question: Future growth of Pluto TV - Management expresses strong confidence in Pluto TV's growth trajectory, aiming for 100 million to 120 million MAUs by the end of 2024 [45][47] Question: Capital allocation priorities - Management outlines a strategy focused on divesting non-core assets to fund streaming growth and return capital to shareholders [55]