Paramount takes a dip as CEO cautions on sequential ad decline
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Paramount Global stock slipped - (NASDAQ:PARA) -7.7%, (NASDAQ:PARAA) -6.6% - as CEO Bob Bakish warned that fourth-quarter advertising will be "a bit below" the level the company saw in the third quarter.
And advertising revenue had fallen 2% in Q3, as Paramount joined others in pointing the finger at macroeconomic headwinds.
Paramount's quick slide off Bakish's UBS conference commentary hit major media rivals as well: Disney (DIS) -2.7%; Warner Bros. Discovery (WBD) quickly -4.1%; Comcast (CMCSA) -1.3%; Dish Network (DISH) -2.6%.
The fourth quarter will be a record quarter for the company's Paramount+ streaming service, Bakish noted. He added the streaming service will join rivals in raising prices.
"There is a benefit in the fact that we run a premium tier and an ad-supported tier, and you will probably see us raise price at different points in time," Bakish said. "So that we can catch any churn down, etc., should not be the case where you raise on premium first, and then follow up on the ad-supported side."
Paramount Pictures is "crushing it," Bakish said, pointing to six No. 1 films in 2022, and "importantly, those are all different kinds of films," he notes, pointing to not only the year's top film (Top Gun: Maverick) but also lower-budget horror hits including Scream and Smile.
Asked about the question tending to circle around Paramount in recent years - media-industry consolidation - Bakish demurs a bit, saying consolidation has been "the rule in business for a long time, certainly ... in media."
"It's hard for me to bet on anything other than: Consolidation will happen in the future. When it'll happen, what the combination is, who's on the top, who's getting acquired? Who the hell knows? But consolidation will happen and streaming will be part of that."