Tough Times For Media Companies

Several major media companies — including Paramount Global, News Corp, and Disney reported their quarterly results.

DISNEY

The Walt Disney Company’s earnings report revealed revenue struggles in most areas, except for international parks. The company reported quarterly revenue of $22.3 billion, slightly lower than the expected $22.5 billion as estimated by Refinitiv. Revenue in linear television further declined, dropping by 7% compared to the same quarter last year.

During the call, CEO Bob Iger announced the company is hiking prices for its streaming service again: the ad-free monthly subscription of Disney + will cost $13.99 beginning October 12, an increase of $3 per month. This is the second time in less than a year that Disney raised the price of its streaming offering; in December, the company upped the price of its ad-free tier to $10.99 from $7.99. Iger said the goal is to push more Disney+ subscribers to the service’s ad-supported option. “The advertising marketplace for streaming is picking up, and it’s healthier than linear television advertising marketplace,” Iger said.

PARAMOUNT

Paramount saw a loss of $299 million, or 48 cents per share. The owner of CBS, Nickelodeon, and the Paramount movie studio posted a second-quarter loss after ad revenue at its different TV networks declined by 10%. It was also off by 39% in the company’s film operations, unable to replicate the previous year’s success thanks to the release of Tom Cruise’s blockbuster Top Gun: Maverick.

Earnings amounted to 10 cents per share. The disappointing results on the company’s linear side occurred despite strong performance in streaming. During the second quarter, Paramount decreased its direct-to-consumer loss to $424 million, an improvement from the year-earlier period loss of $445 million and the first quarter loss of $511 million. In addition, Paramount Global announced that it has agreed to sell book publisher Simon & Schuster to private equity firm KKR for $1.62 billion.

COMCAST

Things are going better for the largest conglomerate in the US, Comcast, which owns Universal Pictures, Dreamworks Animation, Universal Parks and Resorts, MSNBC, Oxygen, E!, and USA Network.

For the quarter ending June 30, Comcast reported earnings of $4.25 billion, or $1.02 per share, compared with $3.4 billion, or 76 cents per share, for the same period last year. Adjusting for one-time items was $1.13 per share for the most recent period. Despite the strong quarter, Comcast President Mike Cavanagh said the company is “clear-eyed about the challenges we and our competitors face.”

WARNER BROS. DISCOVERY

Warner Bros. Discovery reported over $1.7 billion in free cash flow in the quarter, which is more than double the $789 million in the year-ago period. Warner Bros. Discovery has revised its target for cost savings to $5 billion over the next two years, up from the previous target of $4 billion. During the Q2 earnings call, Warner Bros. Discovery CFO Gunnar Wiedenfels stated that WBD had saved more than $100 million due to the strikes in Q2, which ran from April 1 to June 30. Only WGA was on strike then, but TV and film productions were already severely impacted by the solo work stoppage.

NEWS CORP

News Corp also registered a loss. The New York-based media company, which owns The Wall Street Journal, HarperCollins Publishers, and news organizations in the U.K. and Australia, said revenue fell 9% to $2.43 billion for the quarter ended June 30, hurt by foreign-currency fluctuations and the fact that the year-earlier quarter comprised one extra week. The company said it lost $8 million, or one cent a share. That compared with a profit of $110 million, or 19 cents a share, in the year-earlier quarter, boosted by a $149 million tax benefit.

During a call with investors, Chief Executive Robert Thomson said the company was in active negotiations with relevant companies in the artificial intelligence field to address the impact of generative AI, capable of creating various types of content, including text, images, and audio.

News Corp’s news-media segment, which includes the Sun, the New York Post, and the Times in the U.K., posted a 9.2% revenue decline and a 36% increase in segment
earnings, driven by cost-saving initiatives. Advertising revenue across all units fell 11% to $424 million.

Sources: CNBC, MSN, Variety, CNN, The Wall Street Journal