ViacomCBS cashes in on clamour for streaming
Jump of 50% in domestic streaming subscribers from a year ago makes up for a decline in advertising revenue
New York and Bengaluru — Media company ViacomCBS on Thursday beat first-quarter revenue and profit estimates, as higher demand for its streaming services from people hunkered down at home more than offset a drop in advertising revenue due to the coronavirus pandemic.
The jump echoes the growth of streaming service Netflix, which also posted strong net subscriber additions in the quarter.
Shares in Nasdaq-listed ViacomCBS were up 13% at $16.81 by 10am on Thursday.
The media company reported more than 13.5-million domestic streaming subscribers, up 50% year on year, based on demand for original programming such as Star Trek: Picard on CBS All Access and Homeland on Showtime OTT.
ViacomCBS, which produces content for other streaming services in addition to distributing its own films and TV shows, has been preparing to launch a new streaming service that will build on CBS All Access.
In March, the company withdrew its forecast for the year, warning of a hit from the novel coronavirus outbreak, but reaffirmed its goal of exiting 2020 with 16-million domestic streaming subscribers.
Total advertising revenue declined 19% to $2.48bn, due in part to the cancellation of the NCAA “March Madness” basketball tournament because of the pandemic.
Viacom and CBS — controlled by Sumner and Shari Redstone’s National Amusements — completed their merger in December to better compete against Netflix, Walt Disney, Apple and other media and technology giants. The company has said the deal would result in $750m in cost savings, up from the previous target of $500m.
Revenue fell 6.1% to $6.67bn in the quarter ended March 31, but beat the average analyst estimate of $6.59bn, according to IBES data from Refinitiv. Revenue from domestic streaming and digital video jumped 51% to $471m.
ViacomCBS said the fees it collected from cable and satellite operators rose 1.5% to $2.2bn.
Adjusted earnings of $1.13 per share beat analysts’ expectations of $96c, according to IBES data from Refinitiv.
The company reported net income of $516m, or US84c per share, compared with $1.96bn, or $3.18 per share.