ViacomCBS’s overall revenue slumped 6% in the first quarter to US$6.67 billion, the media giant reported Thursday (May 7), as its advertising revenues fell 19% from the year-ago quarter.
The company’s first quarter earnings follow similar results from companies such as Discovery, Inc. and UK broadcaster ITV, both of which reported lower profits and advertising revenues this week as the COVID-19 pandemic continues to disrupt the global economy.
Net earnings from continuing operations fell 74% to $508 million. Meanwhile, revenues for its television entertainment segment declined 13% to $2.94 billion while advertising revenues tumbled 30% to $1.38 billion.
ViacomCBS attributed those losses to the cancellation of the 2020 NCAA Tournament, which broadcast on CBS in 2019, and in comparison to last year’s broadcast of the Super Bowl LIII on CBS.
Its cable networks segment — which includes MTV, VH1, Showtime and Smithsonian Channel, among others — saw a 2% dip in revenues to $2.86 billion as “higher streaming and studio production revenue was more than offset by linear subscriber declines.”
Advertising revenue for the segment was flat, while affiliate revenue fell 6% YOY. The media conglomerate noted that declines in linear advertising and subscribers was again offset by growth in domestic streaming and digital video advertising.
The company saw accelerate subscriber growth and consumption across its streaming platforms in April.
CBS All Access and Showtime OOT sign-ups, daily average streams and minutes watched “rose substantially” compared to March. Live TV and original programming, such as Survivor, drove consumption records in April on CBS All Access.
ViacomCBS reported “record sign-ups and consumption” across pay and free streaming.
In a year-over-year (YOY) comparison, domestic streaming and digital video revenue increased 51% to $471 million, while subscribers passed 13.5 million — a 50% increase.
Pluto TV’s domestic monthly active users reached a record 24 million, up 55% YOY.
President and CEO Bob Bakish (pictured) said in a statement: “ViacomCBS delivered solid results in our first full quarter, including sequential improvement on key financial metrics, as well as clear operating momentum. In the wake of the COVID-19 pandemic, we also took decisive action to fortify our balance sheet, protect our employees and help communities in need. And through new creative strategies and production models, we continue to deliver must-watch content that big audiences love. Importantly, we are just beginning to tap into the potential of our combined assets, and our growing scale, audience reach and earnings power will become even more apparent as the market rebounds and we put the power of our portfolio behind our streaming strategy.”
In response to the pandemic, ViacomCBS stated it is focused on “reinforcing financial flexibility and business continuity.”
The company raised a $2.5 billion debt offering in April and “implemented cost saving initiatives” to mitigate revenue impacts.
It also leveraged “alternative productions models” and its “extensive library” to ensure the continuity of linear and streaming programming as production activities are largely halted to prevent the spread of COVID-19.
In a March 26 filing to the U.S. Securities and Exchange Commission, ViacomCBS updated its fiscal outlook for the year in stating it expects the impacts of COVID-19 – from the postponement of theatrical releases to production delays — to be “material” to the newly-merged company’s financial standing.
In pre-market trading, ViacomCBS stock jumped 16%, as the results had exceeded Wall Street expectations.