Paramount Global — the parent company of CBS, Paramount Studios, PlutoTV, and the Jason Aldean-canceling CMT — continued to see red ink flow from its streaming entertainment services, which collectively lost $424 million for the most recent quarter.
The loss marked a slight improvement from the same period last year, alleviating some investor concerns and sending shares of the media giant up in after-hours trading. But Paramount is still on track to lose a whopping $2 billion this year on streaming as, like other legacy Hollywood studios, it continues to pour money onto the digital bonfire.
Paramount also saw advertising revenue from its TV properties tumble by 10 percent, which was worse than the 8 percent drop expected by Wall Street.
The industry-wide collapse in TV advertising is the result of a perfect storm of mass cord-cutting and fearful consumer sentiment tied to Bidenflation. Households are cutting back on their spending as the price of essential goods including groceries and gas continues to skyrocket to record levels. As a result, corporations are thinking twice about spending big bucks on commercials.
Last week, Warner Bros. Discovery — the parent company of CNN — reported TV advertising had plummeted 13 percent for the most recent quarter.
The cratering ad market is creating an existential crisis for Hollywood media giants, which have traditionally relied on revenue from their TV networks to pump up corporate profits. However, continued cord cutting by tens of millions of Americans is gutting the industry and throwing Hollywood into an existential crisis.
Like other legacy studios, Paramount recently enacted a brutal round of layoffs as the advertising collapse shows no sign of abating.
Paramount is hoping that revenue from streaming services like Paramount+ and Pluto TV will eventually make up for the shortfall in linear TV and save executive hides. But the profligate spending on streaming has so far been a drain on corporate resources as the high-profile flops keep piling up.
Paramount+ recently canceled the little-watched, woke series Grease: Rise of the Pink Ladies, which was nixed after just one season and then removed completely from the platform.
Paramount-owned CMT recently faced backlash for censoring Jason Aldean’s music video for “Try That in a Small Town.” The country music channel caved to pressure from leftist activists who smeared the hit single as racist.