Showtime’s previously announced integration into Paramount+ moves closer as the company reports its fiscal first quarter results. Paramount+ with Showtime will launch in the third quarter.
While the integration is expected to generate about $700 million in future annual cost savings, which Paramount announced last quarter, it also resulted in a programming cost of $1.7 billion in the first quarter, the company said Thursday.
“In connection with our plan to integrate Showtime into Paramount+ and initiatives to rationalize and tailor our international operations to align with our streaming strategy and close or globalize certain of our international channels, in the first quarter we review our content portfolio from 2023. and decided that we would not use certain content on our platforms,” the company wrote in its letter to shareholders.
“Accordingly, we recorded programming costs, which consisted of impairments for content that was removed or abandoned from our platforms, development cost write-offs, and contract termination costs,” it added.
As part of the integration, the company previously announced that it would increase subscription prices.
Paramount+ gained 4.1 million subscribers in Q1, bringing its total to 60 million, up from 56 million subscribers in Q4 2022. The company credited its global subscriber growth to its robust library of content, such as “Star Trek: Picard,” the return of “Mayor of Kingstown,” “Teen Wolf: The Movie” and more.
Paramount also reported a loss of $1.1 billion and revenue of $7.3 billion on Thursday, beating analyst expectations of $7.4 billion. Meanwhile, Paramount+’s revenue grew 65% year over year.
During the earnings call, the company said it expects healthy subscription revenue growth in the coming quarters as a result of Paramount+’s combination with Showtime.
The company recently announced that it will begin production of “Star Trek: Section 31” later this year. The original film will be the first Star Trek film based on a character from “Star Trek: Discovery” and the first Star Trek film to focus on a single character.
However, the streaming rights of “South Park” are uncertain as it has been sued by Warner Bros. Discovery, alleging that Paramount violated the terms of the deal. Paramount is now opposing the company.
Pluto TV, the free ad-supported streaming service, reached 80 million monthly active users, compared to 78.5 million in the previous quarter.