Return Of Sports Scores Big For ViacomCBS

Advertising revenues for ViacomCBS’s broadcast and cable operations (excluding streaming) grew 24% in the second quarter to just over $2 billion. In his quarterly conference call with analysts, President-CEO Bob Bakish attributed that to the return of sports programming, “a material improvement in the ad market and strong execution.

“Of course, in September, we have the return of the NFL, and the folks at CBS and Paramount+ are gearing up for some amazing collaboration. Additionally, we have a great fall lineup on CBS, including the expansion of some key franchises, like NCIS: Hawaii, CSI: Vegas and FBI: International,” the upbeat CEO declared. All, he noted, are also streaming on Paramount+.

Elaborating on second quarter advertising growth, CFO Naveen Chopra said ViacomCBS benefitted from “both the return of the NCAA Men’s Basketball Tournament well as timing shifts for this year’s professional golf tournaments.”

“This quarter’s strong growth rate was also a function of improvement in demand and record scatter pricing compared to the COVID-impacted quarter a year ago,” he added.

Chopra told analysts that the outlook is bright. “Advertising in the back half of the year will continue to benefit from a robust market, though year-on-year trends will be compared to the return of demand in Q3 2020 as we ramped out of COVID and benefitted from record political spend. Advertising growth will improve when new upfront pricing kicks in for Q4,” he said.

“We’re very happy with what we’re seeing in the ad market. We’re clearly benefitting from our leadership position therein. The upfront, as expected, was particularly strong this year. Part of that, of course, was a function of supply and demand at the market level. Supply, particularly on linear, being tight and demand strong, given the ongoing ramp out of COVID. That obviously set the stage for very strong and arguably historic linear price increases. Those increases are what we delivered and those will largely kick in in Q4,” Bakish said during the Q&A with analysts.

The CEO spent much of the call touting ViacomCBS’s streaming strategy, with global streaming subscribers now pegged at 42 million. Streaming advertising grew 102% in the quarter to $502 million and subscription revenues were up 82% to$481 million.

Bakish said the advertising gain was mainly due to the ad-supported free streaming service, Pluto TV. He said Pluto is now on track to generate $1 billion this year.

Also, the subscription service Paramount+ is set to soon launch an “ad-light” offering for a lower monthly subscription price. That, Bakish said, could generate just as much revenue per user as the ad-free service, owing to the combination of subscription and ad revenues.