“ViacomCBS delivered solid results in our first full quarter [January-March 2020], including sequential improvement on key financial metrics, as well as clear operating momentum,” said the president and CEO of the recently merged ViacomCBS Bob Bakish.
“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. I thank ViacomCBS employees around the world for their adaptive creativity and continued focus on serving our audiences, commercial partners and shareholders amid these unprecedented circumstances.”
Overview of Q1 revenue
• Advertising revenue declined 19% year-on-year, but increased 2% excluding a 21-percentage point unfavourable impact from the comparison against CBS’ broadcasts of Super Bowl LIII and the NCAA Tournament in the prior year quarter. International advertising revenue included a 10-percentage point unfavourable F/X impact.
• Affiliate revenue increased 1%, reflecting growth in station affiliation and retransmission fees, as well as subscription streaming revenue, which more than offset declines in pay-TV subscribers. International affiliate revenue included an 8-percentage point unfavourable F/X impact.
• Domestic streaming and digital video revenue – which includes streaming subscription and digital video advertising revenue – grew to $471 million, up 51% year-over-year.
• Content licensing revenue grew 9%, fuelled by growth in original studio production for third parties. Paramount Television Studios, CBS Television Studios and Cable Networks’ studios all benefited from strong content deliveries during the quarter.
• Theatrical revenue declined 3% as strong results from Sonic the Hedgehog were more than offset by prior year quarter revenues, which included carryover performance from Bumblebee.
CBS will finish the broadcast season as America’s most-watched network for the 12th straight year. In the quarter, CBS had the top 2 dramas, 5 of the top 6 comedies and #1 news program, as well as 5 of the top 6 freshmen series.
• Revenue declined 13%, including a 20-percentage point unfavourable impact from the comparison against CBS’ broadcasts of Super Bowl LIII and the NCAA Tournament in the prior year quarter. Excluding that impact, revenue increased 7%, driven by growth in affiliate, advertising and content licensing revenue.
ViacomCBS doesn’t break out international revenue, but advertising revenue from markets outside the US dropped from $291m to $255m. The company noted above unfavourable F/X impact on international earnings. International ad revenue includes sales generated by 5 in the UK and 10 in Australia.
CBS All Access reboot
On a conference call early Thursday New York time, Bakish spoke about plans to relaunch CBS All Access later in 2020. He indicated it would be a broad streaming product and would be rolled out in multiple international markets:
“We will build on this incredible base of content – a catalogue larger than many of the new SVOD entrants – by expanding our originals across the portfolio. This will bring first-window content from each of our brands to this platform. Our biggest franchises will be key, as will our broad programming strength across genres – from animation to science fiction, comedy, reality, kids, crime and procedurals.”