Thursday, August 6, 2020

ViacomCBS: Ad Revenue Drops 27 Percent

ViacomCBS reported financial results for the quarter ended June 30, 2020.

Statement from Bob Bakish, President & CEO:
“ViacomCBS delivered another solid quarter, with clear operational momentum and sequential improvement in key earnings and cash flow metrics. Despite the impact of COVID-19 on revenue in the quarter, we’re successfully managing through the effects of the pandemic, reaffirming the strength of our combined operations. Our results underscored our strong progress delivering on our value-creation initiatives, including integration cost synergies, expanded and new distribution agreements, as well as the rapid acceleration of our streaming business, where we achieved record users and revenue in free and pay while building toward the relaunch of our diversified super service.”

  • Affiliate revenue increased 2%, reflecting growth in station affiliation and retransmission fees, as well as subscription streaming revenue, which more than offset declines in pay-TV subscribers.
  • Advertising revenue declined 27% year-over-year, driven by the adverse effects of COVID-19 on global advertising demand, the comparison against the broadcast of the national semifinals and championship games of the NCAA Tournament in the prior-year quarter, as well as the cancellation and postponement of professional golf tournaments.
  • Domestic streaming and digital video revenue – which includes streaming subscription and digital video advertising revenue – rose to $489M, up 25% year-over-year, driven by 52% growth in streaming subscription revenue and robust growth in Pluto TV advertising revenue.
  • Content licensing revenue was relatively flat, primarily reflecting the licensing of domestic streaming rights to South Park, offset by significant licensing activity in the year ago quarter, as well as the timing of deliveries, which were affected by COVID-related production delays.
  • Theatrical revenue was immaterial in the quarter due to the closure of movie theaters in response to COVID-19.
  • Publishing revenue decreased 8%, mainly driven by lower print book sales as a result of the impact of COVID-19, partially offset by growth in sales of electronic and digital audiobooks.

  • Domestic streaming and digital video revenue rose to $489M, up 25% year-over-year, driven by 52% growth in streaming subscription revenue.
  • Domestic pay streaming subscribers reached 16.2M, up 74% year-over-year.
  • CBS All Access continued to break records, with its paid subscribers, streams and minutes watched reaching all-time highs in the quarter.
  • Original programming, titles from Paramount Pictures and children’s content from Nickelodeon drove strong subscriber acquisitions and engagement.
  • Showtime OTT delivered its best quarter ever in sign-ups, streams and minutes watched, driven by original programming, including Homeland, Billions and The Chi.
  • In free, Pluto TV continued to build on its strong momentum in the US and internationally:
  • Pluto TV maintained its position as the #1 ad-supported streaming TV service in the US, with its domestic monthly active users (MAUs) growing to 26.5M, up 61% year-over-year.
  • Despite the impact of COVID-19, Pluto TV continued to deliver robust advertising revenue growth in the quarter.

  • In July, ViacomCBS unveiled the first major step in transforming CBS All Access into a rebranded super service and remains on track to relaunch this differentiated streaming product in early 2021.
  • In a significant content expansion, the company added more than 3,500 episodes from the ViacomCBS portfolio, spanning series from BET, Comedy Central, MTV, Nickelodeon, Smithsonian and more. This brings the CBS All Access library to more than 20,000 episodes and movies.
CBS All Access will be home to a growing slate of new original and exclusive movies and series, including:
  • Big Brother Live Feeds, The Stand and the animated series Star Trek: Lower Decks
  • The SpongeBob Movie: Sponge on the Run and Kamp Koral, a new original kid’s series premiering in 2021 and the first spinoff derived from SpongeBob SquarePants, one of ViacomCBS’ biggest franchises
  • In addition to its vast library and original content offering, CBS All Access will feature compelling live programming, spanning news, tentpole events and a critical mass of live sports, including:
  • Live streams of local CBS stations nationwide and CBSN, CBS News' rapidly growing 24/7 digital news service
  • CBS finished the broadcast season as America’s most-watched network for the 12th straight year and was #1 in all key dayparts, including Prime, Late Night and Daytime, for the 3rd straight season.
  • Revenue declined 22%, primarily driven by the impact of COVID-19 on the advertising market and lower content licensing revenue.
  • Alongside earnings today, ViacomCBS says its ViacomCBS Networks International unit is launching a premium streaming service internationally.
  • Rollout for the subscription service globally will begin early in 2021. It will feature exclusive premieres of new Showtime series, as well as exclusive CBS All Access originals.
  • It's also featuring Paramount Pictures films and premieres and box sets from Comedy Central, MTV, Nickelodeon and Paramount Network, along with VCNI originals in some markets.
  • Priority for the launch will go to fast-growing over-the-top markets, including Australia, Latin America and the Nordic countries.
  • Along with retailing direct-to-consumer, ViacomCBS will work with existing distribution partners and new distributors in various markets.The rollout will move in parallel with the global launches of ViacomCBS' free streaming via Pluto TV.

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