Media

ViacomCBS hit by plunge in ad spending and cinema closures


ViacomCBS has become the latest media group to suffer from a precipitous fall in advertising spending over the summer, reporting a 27 per cent year-on-year drop in ad revenues in the second quarter as the pandemic ravaged sales.

But strong growth in its streaming services helped power the company behind the Paramount film studio to better than forecast earnings and revenues in the three months to June.

ViacomCBS highlighted its growth in streaming, which the entertainment industry has widely accepted as the future of its business. Like its peers, the group has been trying to grow subscribers and revamp its services to compete with Netflix. By the end of June ViacomCBS had reached 16m subscribers across its streaming services, while revenue from online video and streaming had grown 25 per cent year-on-year to $489m. 

“We’re successfully managing through the effects of the pandemic,” said chief executive Bob Bakish, pointing to the “rapid acceleration” of its streaming business.

However the group’s results were dragged down by a weak advertising market and the shutdown of cinemas because of lockdowns during the crisis, which wiped away revenues at the Paramount film studio. 

Total revenues in the quarter fell 12 per cent year-on-year to $6.3bn, while adjusted earnings per share fell 16 per cent from a year ago to $1.25. However this was better than the $6.2bn in revenues and 95 cents a share Wall Street analysts had predicted.

Shares in ViacomCBS rose 7 per cent in pre-market trading. The stock has dropped 38 per cent this year, while the broader stock market is flat. 



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