ViacomCBS Posts Loss as It Unveils Streaming Plans -- 4th Update
By Dave Sebastian and Benjamin Mullin
ViacomCBS Inc. reported a loss in the final quarter of last year
as Viacom completed its merger with sister company CBS and prepared
to compete with the likes of Netflix Inc. in the increasingly
crowded arena of online streaming video.
In its first earnings report since the merger closed, ViacomCBS
posted a fourth-quarter net loss of $258 million, or 42 cents a
share, compared with a profit of $887 million, or $1.44 a share, in
the year-ago period. Adjusted earnings were 97 cents a share.
Analysts polled by FactSet had expected earnings of $1.32 a
share, or $1.41 a share on an adjusted basis.
Revenue fell 3% to $6.87 billion from the prior year as
content-licensing revenue fell 11% to $1.28 billion. Analysts were
looking for revenue of $7.34 billion.
Shares of the company slumped 18% on Thursday.
The company also said it is targeting $750 million in cost cuts
for the year, revising its guidance upward from $500 million.
The company's advertising revenue fell 2% to $3.03 billion, and
its publishing and theatrical revenues also declined. Its affiliate
revenue rose 1% to $2.13 billion, fueled by growth in reverse
compensation, retransmission and subscription-streaming revenue
that offset declines in pay TV.
ViacomCBS said it had $1.6 billion in U.S. streaming video
revenue last year and finished the year with 11 million U.S.
streaming subscribers, marking the first time that the company has
broken out its online video results in detail.
ViacomCBS plans to court additional subscribers with an expanded
version of CBS All Access, which will include content from across
the company's cable networks, including Nickelodeon, MTV and VH1.
The company's video-streaming services include CBS All Access,
Showtime and BET+.
On an earnings conference call, ViacomCBS Chief Executive Bob
Bakish said the company will offer three main streaming services to
maximize revenue from online video. Pluto TV, the company's
ad-supported service, will be the cheapest option for consumers.
The most expensive option will be anchored by Showtime, ViacomCBS's
premium cable and streaming service. In the middle will be the
expanded version of CBS All Access, which will include more than
30,000 episodes of TV and about 1,000 movies.
"We believe this strategy of free, broad pay and premium pay is
where the market will go," Mr. Bakish said.
Mr. Bakish predicted during the call that the company would have
16 million paid U.S. video-streaming subscribers and Pluto TV would
have about 30 million monthly active users by the end of the
Also on the call, Mr. Bakish said that the company plans to use
its combined financial resources to strike a rights deal with the
National Football League, an agreement that would secure one of the
last remaining staples of linear TV viewership for years to
The company's CBS Sports and sports-betting operator William
Hill US this month agreed to a multiyear deal that would enable the
gambling company to seek new customers among the media giant's
ViacomCBS has named George Cheeks, a top executive at Comcast
Corp.'s NBCUniversal, to succeed Joe Ianniello as head of
CBS-branded assets. Mr. Cheeks will assume his role March 23. Mr.
Ianniello, who was interim CEO of CBS before it merged with Viacom
in December, will be departing the company.
The company late last year said it was acquiring a 49% stake in
movie and television production company Miramax Pictures from BeIN
Media Group for $375 million as ViacomCBS looks to broaden its
programming holdings and put more content online. Miramax was
founded in 1979 by brothers Harvey and Bob Weinstein. Harvey
Weinstein, who later left to form the Weinstein Co., faces a series
of sexual-assault allegations and has been charged with rape,
criminal sexual act and two counts of predatory sexual assault.
Write to Dave Sebastian at firstname.lastname@example.org and Benjamin
Mullin at Benjamin.Mullin@wsj.com
(END) Dow Jones Newswires
February 20, 2020 17:27 ET (22:27 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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