Paramount Global's Q4 2024: Contradictions Unveiled in Content Strategy, Spending, and International Growth

These are the key contradictions discussed in Paramount Global's latest 2024Q4 earnings call, specifically including: Paramount+'s content strategy and growth expectations, Paramount+'s content spending allocation, and international market strategy:



Paramount+ Growth and Profitability:
- Paramount+ added 10 million new subscribers in 2024, driven by a strong Q4 with 5.6 million new subscribers, marking the highest quarterly growth in two years.
- Engagement improved by 20% per user, leading to a measurable improvement in churn of over 100 basis points.
- Subscription revenue grew by 14% in Q4, contributing to an overall D2C revenue increase of 8%.
- The growth and engagement improvements led to a significant improvement in D2C profitability of $1.2 billion for the year.
- The success of the content slate, including hits like Land Men and Tulsa King, contributed to Paramount+'s strong performance.

D2C and Linear Transition:
- D2C segment revenue grew by 8% in Q4, driven by a 18% increase in direct-to-consumer advertising and a 9% growth in subscription revenue.
- The transition of the advertising business from linear to digital is ongoing, with a focus on expanding the client base and enhancing attribution capabilities.
-declining affiliate revenue in TV Media by 6.7% in Q4 and 4% in advertising revenue, reflecting broader trends in the linear ecosystem.

Financial Stability and Free Cash Flow:
- Adjusted OIBDA grew by 30% to $3.1 billion, with a significant improvement in D2C profitability and $489 million in free cash flow for the full year.
- The net leverage improved to 3.8x, reflecting continued financial stability and strategic investments in content and technology.
- Free cash flow is expected to grow in 2025, despite restructuring costs, as content spend stabilizes and restructuring expenses decline over time.

Franchise and Content Strategy:
- Paramount's franchise strategy, including Sonic the Hedgehog and Yellowstone, contributed significantly to box office success and streaming engagement.
- The company released several successful films in Q4, including Smile 2 and Gladiator 2, with global box office revenue of nearly $900 million.
- The strategy will continue with anticipated releases like Mission Impossible: The Final Reckoning, aiming to capitalize on Paramount's rich library and IP.