Paramount’s direct-to-consumer business, and a decent performance by Transformers: Rise of the Beasts, helped keep its Q2 revenue more or less on an even keel. The company’s overall revenue for the quarter came in at US$7.6 billion, which is down just 2% from the same period last year. 

Holding steady is a more significant achievement than meets the eye, given that Paramount’s theatrical revenue for Q2 2023 was down by a whopping 70% compared to the same period last year, when Top Gun: Maverick was still doing big business at the global box office. (The pic has made more than US$1.4 billion in total.)

This year’s most high-profile Q2 release was June’s Transformers: Rise of the Beasts (pictured), which has earned more than US$433 million globally against a US$200-million budget. 

Paramount+ was the company’s biggest earner this quarter, adding a million new global subscribers since Q1 to hit a total of roughly 61 million. This has driven subscription revenue up by 47% to US$1.2 billion, and DTC advertising revenue up by 21% to US$441 million, thanks to more impressions on Pluto TV and Paramount+. 

Licensing revenue remained flat at US$589 million—up US$2 million since Q2 2022. And on the TV side of Paramount’s business, revenue was down 2% to US$5.1 billion, due to a slight drop in earnings from advertising and its affiliate and subscription business. 

The company’s focus going forward will be on scaling its streaming platforms and gearing up for revenue growth in 2024, said president and CEO Bob Bakish in the earnings report that was released yesterday. The streaming industry is having a peak year for investment, and Paramount is working on being efficient and increasing the value of its own platforms. 

Looking ahead, Paramount is poised to benefit financially from a definitive agreement it signed yesterday to sell publishing company Simon & Schuster to investment firm KKR for US$1.6 billion in cash. When the acquisition closes, Simon & Schuster will operate as a private company, and the proceeds from its sale will give Paramount some financial flexibility to invest in new content and deliver revenue growth.

The 100-year-old publishing house currently has more than 36,000 titles in its catalogue, and it publishes roughly 300 kids books annually, including a collection of Peanuts books and the Big Nate series, which Paramount+ and Nickelodeon have adapted into an animated TV show. 

“We are pleased to have reached an agreement on a transaction that delivers excellent value to Paramount shareholders, while also positioning Simon & Schuster for its next phase of growth with KKR,” said Bakish.