(Reuters) -Paramount Global missed quarterly revenue estimates on Friday as a lack of big hits at the box office and declines in its cable business outweighed better-than-expected subscriber growth at its streaming service after the return of NFL content.
Revenue at the TV media business, which includes CBS and MTV, fell 6% in the third quarter due to lower spending from advertisers, a drop in subscribers and absence of pay-per-view boxing events.
Customers have been cancelling cable TV subscriptions in favor of streaming platforms, eroding a lucrative profit engine for traditional media companies that are still struggling to improve the margins of their streaming businesses.
Paramount and Skydance Media agreed to merge in July, forming a new entity that would enhance the media giant’s content creation capabilities and expand its digital platforms, including Paramount+ and PlutoTV.
The deal is expected to close in the first half of next year, Paramount said on Friday.
Its streaming unit benefited in the quarter from price hikes at Paramount+, sports content such as the National Football League (NFL) and the second season of crime drama series “Tulsa King”.
Paramount+, the company’s flagship streaming platform, added 3.5 million subscribers in the quarter, compared with a loss of 2.8 million subscribers in the previous quarter. The additions were higher than estimates of 2.46 million subscribers, according to data from Visible Alpha.
The streaming business reported an adjusted operating income of $49 million for the quarter, compared with a loss of $238 million a year earlier. Analysts had expected the company to report a loss of $160.1 million, according to data compiled by LSEG.
Paramount Global reported revenue of $6.73 billion, compared with estimates of $6.95 billion.
Revenue from its filmed entertainment business fell 34%, weighed by fewer releases and lower revenue from home entertainment.
It had one major theatrical release this quarter, the animated “Transformers One”, which raked in revenue of $127 million from the global box office.
(Reporting by Harshita Mary Varghese in Bengaluru; Editing by Devika Syamnath)
