Thursday, May 06, 2021

ViacomCBS Reports Q1 2021 Earnings Results

ViacomCBS Reports Q1 2021 Earnings Results

--- Drove Robust Global Streaming Revenue Growth, up 65% Year-Over-Year, Fueled by Strong Increases in Users and Product Monetization

-- Added 6M Global Streaming Subscribers to Reach 36M Total Streaming Subscribers in the Quarter, and Increased Global Pluto TV MAUs by 6M to Reach Nearly 50M Global MAUs

-- Delivered 69% Year-Over-Year Growth in Streaming Subscription Revenue, Driven by the Significant Momentum of Paramount+

-- Generated 62% Year-Over-Year Growth in Streaming Advertising Revenue, Reflecting the Continued Domestic Growth and International Expansion of Pluto TV

--- Increased Advertising Revenue 21% Year-Over-Year and Affiliate Revenue 5% Year-Over-Year, Both Exclude Streaming Revenue

--- Achieved Strong Total Company Growth in Revenue, Operating Income, Adjusted OIBDA, as well as Reported and Adjusted Diluted Earnings Per Share

NEW YORK--May 06, 2021--ViacomCBS Inc. (NASDAQ: VIAC; VIACA) today reported financial results for the quarter ended March 31, 2021.


“In Q1, we accelerated our expansion in streaming with the launch of Paramount+ further enhancing ViacomCBS’ ecosystem of premium, pay and free services. The strong consumer response we have seen is evident in today’s numbers – we have grown global streaming revenue 65 percent year-over-year and we added 6M global streaming subscribers, driven by Paramount+, to reach 36M streaming subscribers globally. In addition, we now have almost 50M global Pluto TV MAUs. Our early momentum in streaming is a testament to the breadth and relevance of our differentiated offerings, as well as our opportunities for growth through Paramount+, as we continue to ramp the availability of live sports, original series and blockbuster movies over the course of the year. ViacomCBS also achieved another strong quarter of results in our advertising and affiliate businesses, which continue to demonstrate the extraordinary power of our company to reach audiences and deliver for our partners globally.”



--- Advertising revenue, which excludes streaming revenue, grew 21% year-over-year, driven by CBS’ broadcasts of Super Bowl LV and NCAA Tournament games, which were partially offset by lower linear impressions.

--- Affiliate revenue, which excludes streaming revenue, increased 5% year-over-year, reflecting higher reverse compensation and retransmission fees, as well as expanded distribution, partially offset by a decline in cable subscribers.

--- Streaming revenue rose 65% year-over-year:

-- Streaming advertising revenue grew 62% year-over-year, driven by advertising on Pluto TV, Paramount+ and other digital video platforms.

-- Streaming subscription revenue grew 69% year-over-year, reflecting 63% growth in global streaming subscribers.


--- Global streaming subscribers rose to 36M in Q1, adding 6M subscribers.

-- Subscriber additions in the quarter were led by Paramount+.

- On Paramount+, the biggest drivers of sign-ups were live sports and specials, including the Super Bowl, NCAA Tournament, UEFA Champions League, Oprah with Meghan and Harry and The Grammy Awards, as well as kids’ content, including programming from the SpongeBob universe and iCarly, and original programming, including The Stand and Star Trek: Discovery.

- Original programming, content from cable brands and Paramount movies drove almost half of Paramount+ subscriber engagement.

- Globally, Nickelodeon programming was a significant driver of sign-ups and engagement on Paramount+.

-- SHOWTIME OTT delivered its best quarter ever in sign-ups, streams and hours watched, driven by originals, including Your Honor and Shameless, as well as theatricals.

--- Global Pluto TV MAUs rose to nearly 50M, adding 6M global MAUs in the quarter.

-- Pluto TV MAUs grew both domestically and internationally.

-- Pluto TV international expansion continued, launching in France in Q1.



--- In Q1, CBS was the most-watched network in Prime, Daytime and Late Night and claimed the quarter’s top broadcast program, top 3 dramas, top 5 comedies and top news magazine.

--- Revenue grew 19% mainly driven by CBS’ broadcasts of tentpole sporting events and subscriber growth at Paramount+, partially offset by the timing of licensing.

-- Advertising revenue, which excludes streaming revenue, increased 40% year-over-year, reflecting CBS’ broadcasts of Super Bowl LV and NCAA Tournament games, partially offset by lower linear impressions.

-- Affiliate revenue, which excludes streaming revenue, grew 11% year-over-year, driven by growth in reverse compensation and retransmission fees.

-- Streaming revenue rose 58%, primarily due to subscriber growth at Paramount+ and Super Bowl LV digital advertising.

-- Licensing and other revenue decreased 17% due to a lower volume of licensing principally from COVID-related production delays.

--- Adjusted OIBDA decreased 22% year-over-year, reflecting the company’s investments in Paramount+.


--- In Q1, ViacomCBS owned the most top 30 cable networks among P2+ and P18-49 and more top 30 kids’ series than any other cable family; Showtime had the top 2 scripted shows on premium cable.

--- Revenue increased 14% year-over-year, driven by growth in licensing, as well as higher streaming advertising and streaming subscription revenue.

-- Advertising revenue, which excludes streaming revenue, decreased 7% year-over-year, largely because of a decline in domestic advertising, partially offset by higher international advertising.

-- Affiliate revenue, which excludes streaming revenue, grew 3% year-over-year, reflecting expanded distribution and contractual rate increases, partially offset by linear subscriber declines.

-- Streaming revenue grew 70% year-over-year, fueled by advertising revenue growth from Pluto TV and other digital video platforms, as well as growth in subscribers for subscription streaming services, including SHOWTIME OTT, BET+ and Noggin.

-- Licensing and other revenue increased 82% year-over-year, driven by the licensing of programming to Paramount+ and third parties.

--- Adjusted OIBDA increased 49% year-over-year as a result of the increase in revenue. Expenses increased 1% due to higher participations, which were substantially offset by lower advertising expenses from the broadcast of fewer original programs, and savings from restructuring activities.


--- Revenue grew 23% year-over-year, reflecting growth in licensing revenues partially offset by a decline in theatrical revenue.

-- Theatrical revenue was immaterial in the quarter as a result of the closure or reduction in capacity of movie theaters in response to COVID-19.

-- Licensing and other revenue increased 55% year-over-year because of higher revenue from the licensing of programming to Paramount+ and third parties, as well as revenue from the licensing of Miramax titles.

--- Adjusted OIBDA increased $177 million primarily due to higher licensing revenue, compared to the prior-year period, which included higher distribution costs associated with theatrical releases during the first quarter of 2020.


--- In Q1, ViacomCBS generated $1.7B of operating cash flow from continuing operations and $1.6B of free cash flow†.

--- As of March 31, 2021, the company had $5.5B of cash on its balance sheet and a committed $3.5B revolving credit facility that remains undrawn.

--- In March, ViacomCBS completed the early redemption of senior notes maturing in 2022 and 2023 for a total $2.0B.

--- In March, the company also raised $2.7B of capital through an offering of Class B common stock and mandatory convertible preferred stock.

† Non-GAAP measures are detailed in the Supplemental Disclosures at the end of this release.

You can read Viacom's press release featuring the company's 1st Quarter 2021 results report in full, including tables of ViacomCBS' statements and balance sheets, here on


ViacomCBS (NASDAQ: VIAC; VIACA) is a leading global media and entertainment company that creates premium content and experiences for audiences worldwide. Driven by iconic consumer brands, its portfolio includes CBS, Showtime Networks, Paramount Pictures, Nickelodeon, MTV, Comedy Central, BET, Paramount+, Pluto TV and Simon & Schuster, among others. The company delivers the largest share of the U.S. television audience and boasts one of the industry’s most important and extensive libraries of TV and film titles. In addition to offering innovative streaming services and digital video products, ViacomCBS provides powerful capabilities in production, distribution and advertising solutions for partners on five continents.

For more information about ViacomCBS, please visit and follow @ViacomCBS on social platforms.



This communication contains both historical and forward-looking statements, including statements related to our future results and performance. All statements that are not statements of historical fact are, or may be deemed to be, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Similarly, statements that describe our objectives, plans or goals are or may be forward-looking statements. These forward-looking statements reflect our current expectations concerning future results and events; generally can be identified by the use of statements that include phrases such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “foresee,” “likely,” “will,” “may,” “could,” “estimate” or other similar words or phrases; and involve known and unknown risks, uncertainties and other factors that are difficult to predict and which may cause our actual results, performance or achievements to be different from any future results, performance or achievements expressed or implied by these statements. These risks, uncertainties and other factors include, among others: changes in consumer behavior, as well as evolving technologies, distribution platforms and packaging; the impact on our advertising revenues of changes in consumers’ content viewership, deficiencies in audience measurement and advertising market conditions; our ability to maintain attractive brands and our reputation, and to offer popular programming and other content; increased costs for programming, films and other rights; competition for content, audiences, advertising and distribution; the potential for loss of carriage or other reduction in or the impact of negotiations for the distribution of our content; losses due to asset impairment charges for goodwill, intangible assets, FCC licenses and programming; the risks and costs associated with the integration of the CBS Corporation and Viacom Inc. businesses and investments in new businesses, products, services and technologies, including our streaming initiatives; evolving business continuity, cybersecurity, privacy and data protection and similar risks; content infringement; the impact of COVID-19 (and other widespread health emergencies or pandemics) and measures taken in response thereto; domestic and global political, economic and/or regulatory factors affecting our businesses generally; liabilities related to discontinued operations and former businesses; the loss of key talent and strikes and other union activity; potential conflicts of interest arising from our ownership structure with a controlling stockholder; and other factors described in our news releases and filings with the Securities and Exchange Commission, including but not limited to our most recent Annual Report on Form 10-K and reports on Form 10-Q and Form 8-K. There may be additional risks, uncertainties and factors that we do not currently view as material or that are not necessarily known. The forward-looking statements included in this communication are made only as of the date of this communication, and we do not undertake any obligation to publicly update any forward-looking statements to reflect subsequent events or circumstances.

ViacomCBS Inc. Q1 2021 Results - Earnings Call Transcript via Seeking Alpha:

ViacomCBS Inc. (VIAC) CEO Robert Bakish on Q1 2021 Results - Earnings Call Transcript

ViacomCBS Inc. (NASDAQ:VIAC) Q1 2021 Earnings Conference Call May 6, 2021 8:30 AM ET

Company Participants

Anthony DiClemente - EVP, IR

Robert M. Bakish - President and CEO

Naveen Chopra - EVP & CFO

Conference Call Participants

Michael Morris - Guggenheim Securities

Brett Feldman - Goldman Sachs

Ben Swinburne - Morgan Stanley

Alexia Quadrani - J.P. Morgan

Rich Greenfield - LightShed Partners

John Janedis - Wolfe Research


Good day everyone and welcome to the Viacom Conference Call. Today’s call is being recorded. At this time I would like to turn the call over to Executive Vice President of Investor Relations, Mr. Anthony DiClemente. Please go ahead sir.

Anthony DiClemente

Good morning everyone and thank you for taking the time to join us for our first quarter 2021 earnings call. Joining me for today’s discussion are Bob Bakish, our President and CEO and Naveen Chopra, our CFO. Please note that in vision to our earnings release we have trending schedules containing supplemental information available on our website. We also have a slide a presentation for your to follow along with our remarks.

Want to refer you to the second slide in that presentation and remind you that certain statements made on this call are forward-looking statements that involve risks and uncertainties. These risks and uncertainties are discussed in more detail in our filings with the SEC. Some of today's financial remarks will focus on adjusted results. Reconciliations of these non-GAAP financial measures can be found in our earnings release or in our trending schedules, which contain supplemental information, and in each case, can be found in the Investor Relations section of our website. Now I will turn the call over to Bob.

Robert M. Bakish

Thanks Anthony. Good morning everyone and thank you for joining us. It's been about 10 weeks since we laid out our streaming strategy and goals at our investor event. Since then we have successfully launched Paramount+ in March and I'm thrilled with where we are in streaming and overall. On today’s call I'll cover three topics. First, ViacomCBSs strong Q1, a quarter with clear operating strength and sequential improvement in key financial metrics. Second, the company's momentum in streaming. Momentum which is clearly visible in the metrics across fee, pay, and premium. And momentum which gives us even more confidence in our strategy. And third, a path forward, an overview of the content we have coming and our plan to build on the early success of Paramount+ by leaning even more. Then I will hand it over to Naveen to provide additional financial and operational detail before opening it up to take your questions.

I'll start with Q1 2021 results. Well I am pleased to say we achieved another quarter of year-over-year growth in revenue, adjusted OIBDA, and adjusted EPS further demonstrating the strength of ViacomCBS and our related recovery from COVID’s impact on the business. It all starts with the power of our content and its enduring popularity with audiences. In Q1 ViacomCBS had the number one share of viewing in the U.S. across key demos. As part of that CBS currently ranked number 1 among all broadcasters and we'll finish the 2020-2021 season as America's most watched network in primetime for the 13th straight season. We also own the most top 30 cable networks among persons 2 plus and persons 18-49 in the quarter. And SHOWTIME had the top two scripted shows on premium cable.

In social, ViacomCBS was the number one company among broadcast, cable, radio, and film property in global social news. And as you will hear momentarily, streaming consumption is on a powerful growth trajectory. Strong [ph] performance translated into total revenues of $7.4 billion, a 14% increase year-over-year driven by strength across key revenue types including advertising, affiliate, and streaming. In advertising which now excludes streaming, revenue grew 21%. The big picture here is that underlying advertising demand is strong and trending in a positive direction as the reopening of the economy gains momentum. And of course we clearly benefited from our broadcast of the Super Bowl and NCAA Tournament games.

In affiliate which now also includes streaming we are seeing the power of the combined company manifest itself as revenue grew 5% benefiting from successful renewal activity, incremental carriage, and price increases. And since our last call 14 ViacomCBS cable networks including Comedy Central, MTV, Nickelodeon, and BET went live on Hulu’s vMVPD platform. We also completed a new distribution deal with Frontier further demonstrating our valuable partnerships and must have content. And we have seen robust growth in global streaming revenue which is up 65% year-over-year. I'll dig into this momentarily. On top of that we have substantially strengthened our financial position benefitting from the $1.7 billion of adjusted free cash flow we generated in the quarter and fortified by the $2.7 billion of capital we raised from our equity offering in March.

Now I'd like to spend some time on our strategy and execution in streaming. Starting with free, where Pluto TV is the largest free, ad supported streaming service across all metrics; monthly active users, total viewing hours, and revenue. This based on all publicly disclosed information. Clearly the top of funnel continues to be robust particularly as Pluto TV added 6 million MAUs in the quarter, bringing the total global monthly active users to nearly 50 million, reflecting continued domestic growth and international expansion. And that user growth is translating into strong advertising performance. Across all our streaming advertising businesses, we saw a 62% surge in year-over-year growth in streaming advertising revenue, reaching $428 million in the first quarter. That growth was lead by Pluto TV, where revenue more than doubled year-over-year. High value connected TV usage accounts for the overwhelming majority of Pluto TV consumption with domestic monthly watch time per user increasing 28% year-on-year, making it a very desirable advertising platform for our client.

To build on this growth, Pluto TV continues to substantially scale its content offerings. During the quarter, Pluto TV launched 19 new channels, including Major League Baseball, Smithsonian, and Paramount+. All in Pluto TV now has over 150,000 hours of content from 250 active U.S. partners. And this week, we launched Pluto TV en Español, a bold new update and expansion essentially doubling Pluto TVs U.S. Hispanic offerings to nearly 50 channels and 20,000 hours of content. This, alongside the existing English offering makes it ideal for bilingual audiences as well. Internationally, we also continue our expansion of Pluto TV. During the quarter we launched in France and are now in 25 markets spanning Latin America, including Brazil, the UK, Germany and Spain. Bottom line, Pluto TV has seen robust global growth in usage, monetization, and sell through benefiting from a strong set of underlying drivers and over delivering across all metrics.

In premium streaming, Showtime OTT had its strongest quarter ever, delivering another record setting quarter in sign-ups while generating unprecedented viewership. In fact, it was the best quarter ever for streaming and hours watched on the service. Viewers were highly engaged, driven by hits like Shameless and Your Honor and looking forward the content lineup for Showtime over the next year looks really strong. And then there's Paramount+. As I said in our Investor Day, Paramount+ comes to the streaming space with real competitive advantages and with a strategy that's unique to the marketplace. As a result of the strong launch of Paramount+ on March 4th and the continued momentum in our other streaming services, we added 6 million new global streaming subscribers in the quarter, bringing our total global streaming subscribers to 36 million. Needless to say, we're thrilled with these early results. We're clearly seeing the benefit of putting the full power of ViacomCBS behind Paramount+. The service benefited from a dramatically expanded and diversified content place, communicated through a robust multi-platform marketing campaign.

March was our biggest month ever for sign ups and consumption was strong with watch time for active subscriber up 17% year-over-year. The broadening of the service is clearly working. In fact, almost half of subscriber engagement came from originals as well as content from Paramount and our cable networks. And our diversified content mix, including kids content, content from MTV, and sports like soccer, reduced the average age of new subscribers by six years in the quarter. Looking ahead, we're excited about the ad supported Paramount+ 499 tier, which will be coming in early June. Paramount+ joins Pluto TV's premium digital inventory and anchors of our ViacomCBS IT advertising offering, providing us with another powerful tool to showcase the full advertising power of ViacomCBS and our ability to satisfy the growing demand among advertisers in the category.

Internationally, we launched Paramount+ in Latin America, Nordics, and Canada and these markets are also showing strong initial performance when it comes to both subscriber and engagement trends. And as part of the international rollout, we're expanding our distribution and awareness of Paramount+ by signing creative partnerships with leading MVPDs and e-commerce platform. For example, in April Paramount+ launched on Megacable one of the largest cable operators in Mexico. Also in April, Paramount+ partnered with Mercado Libre, the largest e-commerce ecosystem in Latin America with recent launches in Brazil and Mexico.

Another international transaction I want to highlight is our agreement to acquire Chilevision, the leading broadcast network in Chile. This deal will strengthen and expand our presence in the southern cone of Latin America and help accelerate our streaming strategy in the region by expanding our already substantial Spanish language library and production capabilities. Together with Telefe in the south cone, Chilevision will contribute to ViacomCBS International Studios becoming one of the largest content creators of Spanish language globally. And it's a great promotional asset for our streaming product offerings as well.

Stepping back from this it's clear our unique strategy across free, premium, and paid is working, which is why we're leading in even more. As you know, we completed a $2.7 billion capital raise in March. Naveen will speak about this in greater detail in a few minutes, but know that we did the transaction because we saw an attractive opportunity to raise capital to fund incremental content and other investments to further drive our streaming ambition. And we've already begun to move on a few early opportunities in this regard.

I want to finish by speaking a bit more of what's to come, particularly from a content perspective. In February, we laid out a content strategy for Paramount+, a strategy focused on key pillars to differentiate the service in the market; sports, news, kids, unscripted reality, scripted, and movies. And since launch, that content has already started to scale and show real momentum. There's no question that live sports and breaking news clearly differentiates Paramount+ and Q1 saw a series of important events in this lane, including the Super Bowl, WAPA, the NCAA Men's Tournament, the PGA Tour, and Oprah's Interview Special with Megan and Harry. These events were key engagement and sign-up drivers. And looking forward, we're excited about our expanded soccer slate, the return of the NFL, college football, and more.

Speaking of football, as you know in March we extended our partnership with the NFL for another decade. This is a partnership we are thrilled about and streaming rights are a critical component of that deal. Among other things, Paramount+ will have the flexibility to distribute NFL games on both the premium tier 999 and the new 499 ad supported tier. And as we announced in February, inside the NFL will be exclusively available on Paramount+ starting this fall. And we're continuing to build critical mass in soccer. CBS Sports and Paramount+ recently acquired exclusive U.S. rights to Serie A, the premiere Italian Soccer League. It's another major step in us becoming the number one destination for soccer fans with an unbeatable portfolio of now over 1400 soccer matches each year with teams including Juventus, Real Madrid, and Chelsea. This on top of all the other marquee CBS sporting events we deliver.

Moving to kids, thanks to our Nickelodeon brand and massive library with renowned characters and global franchises, subscribers are discovering new content or re-watching some of their favorite shows. Since the Paramount+ launch, we've seen robust audience engagement with kids and family content. Nickelodeon originals like the SpongeBob Movie Sponge on the Run, Cape Coral, as well as library content like Paw Patrol were some of the strong performers in the quarter driving sign ups and engagement. And we're excited for the upcoming launches of Rugrats in May and iCarly in June, new versions of two iconic franchises that have fans buzzing in social.

In unscripted and reality, the fastest growing genre in streaming, we saw solid early momentum. Exclusive original shows like MTV’s The Challenge, All Stars and Real World Homecoming plus library shows like Ink Master all had very strong engagement and we continue to ramp up reality series on the platform, including new exclusive originals starting with Cradle to the Stage, starring Dave Grohl later this month, a new RuPaul in June and later in the year, the return of Behind the Music. And in scripted originals like The Stand, Younger, and Star Trek Discovery are performing extraordinarily well. By the end of the year you'll start to see a substantially scaleable volume of new exclusive originals, including new drama series like the First Yellowstone's spinoff Y:1883. Female led drama like Why Women Kill and the Good Fight, comedy such as Inside Amy Schumer, Trevor Noah Weekly, and The Game; and original franchises like Star Trek Prodigy and the fourth season of Star Trek Discovery. In addition, we're expanding our global Paramount+ pipeline. As a first step in this endeavor we're adding a number of originals produced by Viacom International Studios. This will start as soon as this summer with scripted content produced in Latin America and factual content produced out of the UK.

Finally, turning to movies where we are poised to dramatically enhance the scale of our offering. In fact, we will shortly kick off a mountain of movies marketing campaign where we will highlight the thousands of new movies we're adding to Paramount+, including blockbuster hits and exclusive originals. We start by greatly expanding the depth of the film library on the service. 1000 additional movies are going live in early June with additional titles following through July, bringing the total to over 2500. Hits like The Avengers and Skyfall will be available on the service soon, as well as a bunch of great Paramount films like Mission Impossible Ghost Protocol, Rocket Man, Sonic, the Hedgehog, and more. And I'm thrilled to announce that Infinite, a sci-fi thriller starring Mark Wahlberg, will premiere exclusively on Paramount+ in June. That will be followed by the streaming premiere of A Quiet Place Part 2 after its 45-day theatrical run and we will follow that with the Paw Patrol movie, a treat for families eagerly awaiting a feature length version of the most popular preschooler character in the world. In addition, new original movies like Paranormal Activity and The In Between will premiere on Paramount+ by the end of 2021. And all of this is a preview to a substantial ramping up of original movies next year, where we expect to begin averaging an original movie a week in 2022. We'll have more on this in the months ahead.

And finally, we're moving to accelerate Paramount+'s global expansion. We have already established ourselves in Canada, the Nordics, and all of Latin America including Brazil. Next up is Australia on August 11th, a launch that will include Paramount Movies, Showtime, and Paramount+ Originals in addition to a cross-section of product from our cable brands and Network 10. By the end of 2021, we'll have launched subscription streaming services led by Paramount+ in 25 markets, and now we plan to almost double that by the end of 2022 when our global streaming footprint will reach 45 markets, all in less than two years. Net, net, we're thrilled with the performance of Paramount+ thus far, our strategy is working, we're investing in content with a disciplined approach, we have a lot in the pipeline and we look forward to what's to come. Now, I'll turn it over to Naveen to cover the quarter's financial performance in greater detail. Naveen.

Naveen Chopra

Thank you, Bob. Good morning, everyone. As Bob mentioned, we had very strong financial results in the first quarter of 2021 across revenue, adjusted OIBDA, adjusted EPS, and adjusted free cash flow. Our results reflect robust growth in streaming where we saw record subscriber additions and revenue growth of 65%, as well as solid performance in our linear business. Our first quarter streaming results are evidence of the early positive response we have seen from the launch of Paramount+ and continued momentum in Pluto TV and Showtime OTT. We added 6 million global streaming subscribers in Q1, marking a record quarter of subscriber growth and taking us to 36 million global streaming subscribers as of quarter end. The significant majority of new subscribers were from Paramount+ and of those the significant majority were domestic customers. The combination of subscriber growth and increased engagement helped streaming subscription revenue grow 69% to 388 million. These results include the impact of subscribers whose free trials extended beyond quarter-end and international subscriber growth, where ARPUs are generally lower relative to domestic subscriptions.

Turning to streaming and advertising, the largest driver of growth came from Pluto TV, where we added 6.4 million global Pluto TV MAUs in Q1, and now reached nearly 50 million MAUs globally. Pluto TV engagement also continues to improve. Average monthly watch time for domestic user increased 28% year-on-year in the first quarter. The increased engagement combined with domestic sell through rates that were up 600 basis points drove significant improvements in Pluto's domestic ARPU. The evolution of Pluto's domestic business also gives us confidence that a similar pattern of international monetization growth can be unlocked as we scale globally. Overall Pluto TV revenue more than doubled in Q1 on a year-over-year basis for the third consecutive quarter.

The strong advertising performance from Pluto TV and our other brand specific streaming sites and apps, all of which are critical drivers of our IQ Digital Ad platform drove a 62% increase in streaming advertising revenue to 428 million. Advertising revenue which excludes streaming grew 21% in the quarter to 2.7 billion, driven by the success of Super Bowl 55 and the return of the NCAA Men's Basketball Tournament, neither of which aired on CBS in the prior year period. Advertising demand continues to improve with strong scatter pricing relative to the upfront and last year scatter market. Affiliate revenue, which also excludes streaming grew 5% in Q1 to 2.1 billion. We continue to benefit from distribution renewal signed in 2020 that included incremental carriage and improved economics as well as contractual rate increases, which more than offset the decline in the number of paid TV subscribers.

Licensing and other revenue grew 11% to 1.8 billion. Keep in mind that licensing revenue is reported on a consolidated basis after the elimination of significant intercompany licensing transactions related to content on Paramount+. Theatrical revenue was insignificant in Q1 as we had no releases in the quarter. We are looking forward to our first theatrical release in over a year with A Quiet Place 2 which debuts in theaters on May 28th. Total revenue was 7.4 billion, up 14% year-over-year leading to adjusted OIBDA of 1.6 billion up 31% year-over-year and diluted EPS was $1.52, up 36% year-over-year. The growth in adjusted OIBDA benefited from our strong revenue growth partially offset by costs associated with our investment in Paramount+. Q1 adjusted free cash flow was 1.7 billion benefiting from OIBDA growth and the timing of cash production spend and favorable collections among other factors.

Moving to the balance sheet, during Q1 we redeemed 2 billion of debt and raised 2.7 billion of cash from the sale of equity and mandatory convertible preferred securities. In combination with our strong free cash flow generation, these transactions resulted in 5.5 billion of cash on hand and total debt of 17.8 billion at quarter-end. This translates to a 2.2 times net leverage ratio as of March 31st.

I'd now like to share some insights regarding the second quarter. We expect continued robust growth in streaming revenue with the Q2 growth rates for total streaming revenue, streaming advertising revenue, and streaming subscription revenue, all accelerating versus the Q1 growth rates. Streaming subscription revenue in particular will benefit from Paramount+ subscribers who began free trials in Q1, but only start generating revenue in Q2. We expect another quarter of strong double-digit advertising growth as demand continues to improve and scatter pricing remains at all-time highs. We will also benefit from the NCAA final four and championship games which didn't occur in the prior year period.

Turning to affiliate revenue, we expect to see modest acceleration in the year-over-year growth in Q2 relative to Q1 as we continue to benefit from several new distribution deals signed in 2020 and early 2021, which include increased pricing and expanded distribution. For content licensing, we expect revenue to decline year-on-year because Q2 2020 included significant revenue and OIBDA from the licensing of South Park. In regard to Q2 adjusted free cash flow, we expect some reversal of the working capital tailwinds which benefited Q1, largely driven by the timing of production spend and continued investment in Paramount+.

Looking further out, our enthusiasm for the potential of streaming continues to grow. The streaming market is global, it is growing fast, and we are well positioned to take share. Streaming presents a compelling market opportunity for two key reasons; one, unit upside where streaming allows for a greater addressable base of viewers go linear and two, ARPU upside because streaming ARPU's have a more compelling long-term trajectory than linear. The unit upside is especially true internationally where streaming allows us to reach beyond the Pay TV universe, which has limited penetration in many international markets. And when it comes to ARPU upside, we think that over time the per subscriber economics of streaming can be accretive to linear when considering the combination of advertising and subscription revenue captured by our ecosystem of free, pay, and premium streaming services. We see opportunity to drive Paramount+ subscription ARPU higher as distribution channels and subscriber mix evolve and as we expand our content offering to deliver greater and greater value to customers. And we see even more growth potential in advertising ARPU where both Paramount+ and Pluto TV will benefit from increased engagement, improved targeting, dynamic ad loads, and sell through optimization.

I would also note that in most instances outside the United States streaming economics are already accretive as international linear ARPU is materially lower than streaming ARPU today. This attractive market opportunity is one of the primary reasons we decided to raise capital in March. We intend to use the additional investment firepower to take our streaming efforts to the next level building on the consistent momentum we have demonstrated over the past few quarters and leaning even more aggressively into streaming. You will see us deploy new capital in four major areas. First, we intend to fund development of more original series and movies exclusively for streaming. Second, we will pursue incremental streaming sports rights. Third, we will look to accelerate international launches and market expansion. And fourth, we plan to further reduce the amount of content we licensed to third party streamers instead preserving more of these assets for our in-house streaming services.

We're moving quickly to start deploying this capital. In fact, Bob shared some of our early investment initiatives including the addition of Serie A Football, a Paramount+ exclusive release of the movie Infinite, and the acceleration of our international deployment plan. Nonetheless, the bulk of our investments will occur in 2022 and beyond. In the months ahead, we'll have more to share on these additional investment plans as we aim to capture an even greater share of a growing long-term market opportunity. With that, we can now open the line for questions.

Question-and-Answer Session


Thank you. [Operator Instructions]. Our first question comes from the line of Michael Morris with Guggenheim. Please proceed with your question.

Michael Morris

Thank you guys. Good morning, a couple of questions on the streaming business. First one on Paramount+, appreciate all the detail on signups and engagement. There's a lot in there, hoping to dig a little bit more on trend. I know we're only a couple of months into Paramount+, but we do have some good historic data on -- with all access. So I'm curious if you can talk about how engagement churn has sort of trended with the new product availability, the expanded product and if anything, on the content side in particular has maybe surprised you compared to what you were anticipating and how that might inform some of those investment decisions going forward? And then also on Pluto, I think ad revenue growth is outpacing that sort of combination of usage and per engagement growth -- engagement per user growth. Is that accurate, there's a couple of moving parts in there, and can you kind of provide any context for what the upside is for Pluto maybe compared to how you monetize your linear audiences? Thank you.

Robert M. Bakish

Sure. Yeah, thanks Mike. A nice meaty two part to open here. So in terms of your first question, we are super excited about what we're seeing with Paramount+ and I'd say, it started with the overwhelming learning from what we've seen is that our content strategy is working. There's no question that consumers are embracing a service spanning live sports, breaking news, and a mountain of entertainment. We can see that in the sub numbers. As we mentioned, we added 6 million pay subs in the quarter globally, but the overwhelming piece of that was from peak Paramount+ domestic. And importantly that includes adding younger subs with an average age of new subs down six years. Second point is Paramount+ is showing great lines in terms of engagement. In fact, the percent of our daily subs, which are active, actually the percent of our total subs I should say, which are active on a daily basis is up sequentially and up year-over-year. And we see strong double-digit growth in hours per active user. In fact, that's up about 17% in March versus the prior year.

When you look under that in terms of content, which is obviously the key driver, we continue to see the power of what worked before. That includes sports, where we obviously benefited from the Super Bowl, the NCAA, Golf, and WAFA as we said. It includes originals, including The Stand, Star Trek and others, and includes CBS content. Live content is strong as our shows like MCIS and Hawaii Five-0. But the real news is it's now broader. Nickelodeon in particular is turning into a powerful driver of subs and engagement probably more quickly than we would have thought. It's a clear sub driver since the relaunch and it now accounts for a strong double-digit share of streams. And that's really because of the combination of compelling exclusive originals, of course, the SpongeBob movie, Sponge on the Run and the new Camp Coral series combined with a big known library. That's a recipe that clearly works. I think it's also worth noting that the SpongeBob franchise in totality, quickly moved to the top of the rankers at Paramount+. And probably what's most important here is this is an example of us replicating our strength in a legacy linear position here in kids in streaming. And we've also seen early positives from unscripted and reality as well as movies. So early days for Paramount+, but we very much like what we see in terms of consumer reaction to the product and as you know, based on that we're leaning in even more.

Moving to the second part of your question on Pluto, as you heard today, Pluto TV continues to be an incredible growth engine for this company. And when we look at it, we see four really powerful underlying growth drivers for Pluto TV, all of which are delivering now and all of which have a lot of room to run. That starts with MAUs, as you heard now under just 50 million globally, that's up about 90% like a hair more year-over-year, and we have substantial momentum and opportunity ahead. It then moves to engagement, where we see time -- mentioned it time spent per user continues to increase. And this is particularly as users gained familiarity with the product and as the volume of quality content continues to increase now, about over 150,000 hours in the U.S. We also look at sellout, that was actually up about 600 basis points year-to-year, but we're nowhere near a 100% and so we do have substantial room to run. And equally importantly, if you look at ad load on Pluto TV versus linear, the Pluto TV ad load is substantially below that of linear. And then there's pricing. We see advertisers with a significant demand for in particular Connected TV inventory and that in turn is supporting a great pricing dynamic.

We haven't actually pushed pricing on Pluto TV in the last two years so it's really one of the most efficiently priced products on the marketplace. And that gives us a really great pricing lane going forward when we choose to pull that lever. Last thing I'd say is Pluto TV revenue now more than doubled for the third sequential quarter in a row. Overwhelming driver of that is volume and that's combination of MAUs and time spent. Again, we haven't pushed the price lever and we haven't pushed sell out much. And that's part of our overall streaming growth story. It's the biggest part and it's what helped push us to 62%. So net-net we're in a great situation here on so many levels.

Anthony DiClemente

Thanks a lot Mike. Operator, let's take our next question.


Thank you. Our next question comes from the line of Brett Feldman with Goldman Sachs. Please proceed with your question.

Brett Feldman

Thanks and two if you don't mind. So just following-up a little bit, as you had noted the quarter-end global subscriber number would include anyone that was still in a free trial period and with Paramount+ having launched in early March, anyone who signed up after the launch would have been in their free trial at the end of the quarter. So, you're now two months past the launch, many of those customers have gone through the free month, some of them have gone through a paid month, can you give us any insight into what the free to paid conversion is looking like and maybe how that has compared to what you historically saw with CBS all access? And then Naveen thank you for the color around sort of the four areas you're looking to sort of lean in with your investment on streaming. Can you give us any context, are certain of those a little more front burner than others, you said we might start to see that in the financials next year, what does that mean? And then really the more important question is if you're investing more, how should we think about seeing that payoff, do you think you can meet your long-term targets sooner, do you think there's upside, any further insight there would be greatly appreciated?

Robert M. Bakish

Yeah, sure Brett. So look, to your first question, we like what we're seeing in general with respect to conversion and churn. Unpacking that a bit, conversion rates from trial to pay are consistent with what we've seen historically with all access. And that's despite the fact that we've ramped sub growth pretty significantly and so we're not seeing any kind of degradation in quality as we widen the subscriber net. That's a good thing. And particularly a good thing, given that we had the Super Bowl this year, which clearly brought in a bunch of folks for the Super Bowl, but as with the broader sub-base, they're sticking around for more, again for this broader Paramount+ offering. On the churn side, again remains in the same range as prior year, despite the massive growth in the sub-base. Specifically, to your question of the 30-day free trial which we did for launch, I'd highlight two points. One is, believe it or not the conversion rate was actually marginally above our historical trial conversion rates. So we are happy about that. And second that particular program, the 30-day free trial ended on March 31st, and is no longer in the market.

By the way, a little look forward past the end of the quarter, both conversion and churn improved in April, both versus prior year and versus March. So net-net, we feel great about what we're seeing in this area. I'm going to flip it to Naveen in a second for the second part of your question, but I do want to say, he highlighted the four investment areas. Probably the biggest investment area when push comes to shove, we'll be more originals. We're very excited about what we have in the pipeline on the series side and we see our studios be that Paramount, be that Nickelodeon, be that MTV Entertainment, ramping original studios as part of this capital raise and we're working on that. And of course we talked about movies and how we're ramping that, and really excited about moving to an exclusive original movie per week as we get part of the way into 2022. So a lot going on there in terms of our plans to deploy that capital. Naveen?

Naveen Chopra

Yeah. So let me try to add a little color in terms of how we see the deployment of that capital playing out. You heard Bob talk today about some of the ways in which we're already starting to deploy that capital, which as reminder it's things like the addition of Serie A Football on Paramount+, the Infinite movie being released on Paramount+, a significant acceleration of our international expansion plans, and starting to ramp up to getting an original movie each week on Paramount+. So those things will allow us to start deploying some of the incremental cash. As I said in the second half of 2021, that being said we're obviously not going to spend $2.7 billion overnight. So the bulk of the investment will happen over a multi-year period of time. And we are continuing to be diligent in evaluating a variety of different investment options against one another and we're very focused on the ROI of those across all of the different buckets that we articulated. So I would expect that as we commit to some of those specific plans we'll look to share more about the expense magnitude, the timing of the cash versus the expense which could be different by the way, and I think perhaps most importantly, how those investment plans affect our goals for subscriber and revenue growth, which is obviously the intent, the motivation behind any of those investments is to try to exceed some of the goals that we've already set for ourselves.

One other point that I think is important just to be aware of from a timing perspective, as I said, we are starting to fund some of those -- these early initiatives this year. Though I'd note that our expectations for full year OIBDA and free cash flow really haven't changed materially because of the over performance in Q1. So that is hopefully helpful to you in terms of thinking about some of the timing elements of this.

Anthony DiClemente

Thanks a lot Brett. Operator, let’s take our next question.


Thank you. Our next question comes from the line of Ben Swinburne with Morgan Stanley. Please proceed with your question.

Ben Swinburne

Good morning. Bob, can you talk a little bit more about what we should be expecting with the June product, and if you call it a relaunch or the new tier, anything to add on distribution partners or kind of marketing push? And then Naveen, I'd like to just take another swing at one of the topics from the Investor Day, which is your content spending company-wide post the capital raise sitting here today. Can you -- is there any way to help us think about how you think about the overall growth in content investment for ViacomCBS over the course of the sort of forecast period you talked about at Investor Day? Thanks, both.

Robert M. Bakish

Yeah. So we'll take this sequentially Ben. So on the 499 product, we're really excited about it. It obviously brings live sports, breaking news, and amount of entertainment including this expanded original slate to the market at a lower price point. That's great from a consumer perspective. For us, it also has cost advantages, which improve margins versus the legacy 599 product, which we will be discontinuing from a new subscriber standpoint. If you step back from it, we believe two tiers of Paramount+ really maximizes its ability to drive the total addressable market. Obviously this lower price point at 499 is good for the more cost sensitive consumer and thus helps maximize total subscribers for Paramount+. It also adds another important asset for us in terms of advertising inventory. It will become part of IQ and because there's so much opportunity in high-quality premium streaming, digital advertising, we see the product actually generating higher ARPUs over time than the 999 product. So, it really is quite exciting there. I'd also point out that adding this to our quiver broadened the portfolio we have to work with distributors to meet their objectives, really strengthens our position as a supplier of choice. We add that to our existing offerings, both in free with Pluto TV and the Paramount and Showtime OTT and BET+ paid products. Obviously it's at the lower end of the price point, so it could work for a subset of their consumer base. It also related to the cost structure gives us more flexibility on promotions and so that's something we're excited to deploy. And lastly, I'd note, it will launch in early June with broad distribution. So very excited about the 499 product and how it will continue to drive Paramount+. Naveen.

Naveen Chopra

Yeah, so on the content expense, as you will remember Ben from our Investor Day, we highlighted the fact that we expect streaming content expense to increase materially between 2020 and 2024. And I'd say that our plan for this year 2021 does incorporate some rapid progress in ramping up streaming content. In fact, streaming content expense in 2021 I think will more than double relative to 2020. Now it's important to remember that not all of the expense and cash impact is incremental to total company spend because we do expect to continue to reallocate content from linear to either a shared context where it's doing double duty on both linear and streaming or exclusively on streaming. That being said, we do expect that what we've described as sort of roughly $15 billion of total company content expense to increase modestly over the next few years. So not the entire amount of the increase of streaming investment will not be incremental to the total company, but there will be some increase.

Now that's all pre-capital raise. With the additional capital, we now have the ability to invest more aggressively and so I would expect that streaming content expense and total company expense should be somewhat higher, but very importantly over time generate return in the form of incremental subs and they use streaming revenue. And as I said earlier, most of that impact will really start to be seen in 2022 and beyond. And the piece that we're funding in 2021 as I said earlier, I think is largely offset by some of the over performance we've seen in Q1.

Anthony DiClemente

Great, thanks Ben. Operator, next question, please.


Thank you. Our next question comes from the line of Alexia Quadrani with J.P. Morgan. Please proceed with your question.

Alexia Quadrani

Thank you. Just staying on Paramount+, we've seen some of your competitors experience a pull forward and growth in subs on their streaming platforms during the pandemic, and then Q1 you had the benefit of substantial marketing push and the rebranding which accelerated subscriber growth. I'm curious how you're thinking -- how we should think about growth in subs at Paramount+ over the next couple quarters? And then my follow-up question is just sort of circling back to your comments on international expansion also on Paramount+, you highlight a bunch of markets, you gave us some great color which I really appreciate. I'm curious, where you see the biggest opportunity, what markets, and outside of Spanish language are you ramping up in local language like your peers as well?

Michael Morris

Yeah, sure Alexia, let me take both of those. So actually I don't think a comparison to peer services and how they did or didn't pull forward subscriber growth with COVID is really the right question for us. And that's simply because Paramount+ just launched and it's in a bit of a different situation. With Paramount+ we're ramping up product for new consumers and so we're focused on generating awareness to those consumers and obviously converting them into subscribers. To that end we're focused on executing against the content strategy that I articulated, the specific content additions that we talked about coming in particular as 2021 continues to play out as really the primary driver of growth. And I'd remind you that the good news on that tip is that we have a really exciting content slate coming. Whether you look at the kids' space, things like new version of Rugrats, new version of iCarly, both of which are in the current quarter. And then of course, Star Trek Prodigy later in the year and those are just examples. Scripted space where I'm super excited about the first Yellowstone spinoff. That's something -- that franchise has a big fan base and so bringing a new version exclusively to Paramount+ late in year will be great. And that joins a whole bunch of other scripted shows. Some that are coming back like Why Women Kill and Star Trek Discovery. Reality, really a wheelhouse for us.

And related to that, the music space, which is more general unscripted. I am this Cradle to Stage show, we have with Dave Grohl is cool. RuPaul has a huge fan base, so a new version of RuPaul coming, etcetera. And we got comedies, we talked about movies, our movies push starting in June is massive. And by the way, it's true to the Paramount name so I think movies will have a great home and be a great product for Paramount+. All this content to varying degrees, we'll be supporting with marketing to make sure again, consumers have awareness and we convert them into subscribers. The biggest piece probably will be our movie campaign, a mountain of movies which is about to kick off. So you should look to us to continue to build our global sub-base and actually accelerate revenue growth as the year goes on.

To your second question on international, look this is something that's near and dear to my heart. I look at the international streaming opportunity and it's clearly global and we're going after it. As I mentioned, we'll now be in 45 markets by the end of 2022. Content is of course key to that and this company really has critical mass across genres and across geographies. So that starts with the Viacom Media Networks and that includes Channel Five, Network 10, Telefe, MTV, Nickelodeon, Comedy Central. They bring libraries, they bring local format derivatives, and they bring made for market local content. That library gets a scale out of the gate, the local content both format and originals add really critical elements for subscriber, acquisition and retention in many, many key markets. And Chilevision adds another important piece to this equation.

To your question, international content will also be an important part of fortifying the global Paramount+ pipeline. It's not just about Spanish I would highlight, it's about using our international studio assets to create a robust pipeline for Paramount+ because those studio assets outside the United States bring benefits in terms of access to incremental creativity, really attractive economics, and they help us drive volume further and faster. We mentioned -- I mentioned in a bit in my prepared remarks, we are at the very early stages of bringing this to bear, what is going to be another exciting piece of the equation. Add to that of course we've got output deals that routinely come up giving us incremental access to content from Paramount and CBS and Showtime. So put it together, we've got a lot of content to work with outside the United States for Paramount+, and a lot more is coming. And, when you look at international and ViacomCBS and Paramount+, it's not just the content story.

The other differentiating piece here is our on the ground operations. And they bring real additional advantages unlocking that streaming opportunity. That starts with relationships, whether they're creative or commercial and you've heard two examples of that coming to life in my remarks with Megacable and Mercado Libre, those are on the ground relationships that we were able to convert into streaming opportunity. As we look out it's possible that we'll do some partnerships in select international markets, additional markets, but net-net, I look at this and I'm super excited about the global opportunity for ViacomCBS and streaming and we really do see a strong runway of growth outside the U.S.

Anthony DiClemente

Thanks Alexia. Operator, next question.


Thank you. Our next question comes from the line of Rich Greenfield with LightShed Partners. Please proceed with your question.

Rich Greenfield

Hey, thanks for taking the questions. A couple of them; first, I want to just dig in a little bit deeper into the comments about what people are actually doing on Paramount+. It seems like Nickelodeon just looking at like sort of the top shows every day, seeing things like SpongeBob and Paw Patrol, it seems like they are driving a very substantial part of viewership and wondering, like, when you look at sort of the promotion you talked about sports and some of the stuff that you have and certainly it had some originals, but it looks like the kids' stuff is really driving viewership. I guess a big picture question is like, you said double-digits, like is it half the kids, like how substantial is kids' programming and how do you get more viewership of some of the adults skewing fair, I'd be curious how you're thinking about the marketing message because it seems like kids has been a very powerful force for you? And then I just want to follow up on two things; one, you said you haven't commented are Paramount+ subs higher today than 36 million, could you give us any clarity on that? And then I think you mentioned one movie -- one original movie a week in 2022, does that include the 45 day after movies that are coming out in theaters or is that a dedicated original movie every single week, I just wasn't clear of what you meant by that?

Robert M. Bakish

Sure, Rich, lot there. So on Paramount+ and kids, clearly kids is working for us. And no, it is not half of the consumption. Again, material double-digit percentages, but nowhere near half. What's driving that relative to the other call it genres and demographics is really the fact that we were able to at launch provide not only critical mass of library product, which we can do in other categories, but volume of exciting, exclusive, originals link to known franchises. And that in particular was the combination of the SpongeBob movie, which obviously was a theatrical movie, we chose to redeploy on Paramount+, and the new SpongeBob series Camp Coral. We had that ready to go because we had a movie for theaters and because we had a series that we were going to launch on Nickelodeon, call it linear.

As you look forward, those kind of things start to happen in the other genres. I mean, I'm very excited about what's going on with reality. As you know, we launched with Real World New York, it was only a couple episodes, so it wasn't really volume. And MTV, The Challenge, there was a little more volume, but it's the first series. As the year plays out, we basically have one new exclusive original in the reality space and unscripted space every month. So that's more fuel for that tank and that should start converting that genre lane for Paramount+, and we will market that particularly leveraging our linear networks and social where we know those fan bases are.

The other one I'd really highlight is movies. I mean, we have Paramount -- we have movies on Paramount+ today, but frankly not that many of them. That game changes dramatically in June, where we first dropped an additional 1000 and there are real movies, they're not deep library. Then we late in June have Infinite, which can create a lot of noise. I've seen the films on film, people love Mark Wahlberg. And then that leads to more -- a lot more, I call it library, again not deep library, including pay one library in July, and then quiet place on a short window from theatrical leading into later in the summer Paw Patrol. So we got a lot going on. And people love movies, in premium television. They love movies in streaming, they are based on engagement, love movies on Paramount+, we just don't have the volume we're about to have.

Let me use that to actually go to your third question for a second, which is around a movie a week, does it include short window, pay one or not? Yes, it includes short window pay one, call that a dozen pictures a year. The original movie per week will be an exciting movie per week. It will be a range of different kinds of movies. Some of them will be blockbusters that are heavily marketed from theatrical, the quiet place to type films. Some of them -- the vast majority of them will be made for Paramount+, those will be sourced from Paramount through our Paramount players studio or sub studio, as well as through other studio operations we have including Nickelodeon. As you know, we have the awesomeness side of Nickelodeon, which has done a great series of YA movies, including for streamers. So really excited about deploying that and getting that to have something on the platform every week that's fresh for someone to watch.

Your second question, I have a mark here of 36 plus.

Anthony DiClemente

Yeah, I think he was asking about subs post the end of the quarter. We're not providing any numbers, but just remember that 36 is total global streaming subscribers rich, not just paramount+.

Anthony DiClemente

Thanks a lot Rich. Operator we have time for one last question.


Thank you. Our next question comes from the line of John Janedis with Wolfe Research. Please proceed with your question.

John Janedis

Thank you. Bob, a lot of questions have been coming up about the value of traditional linear networks and the historical pricing model breaking as direct-to-consumer rollouts accelerate. So I wanted to ask you to what extent do you see changes in pricing for TV or cable networks as Paramount+ scales into the 10s of millions domestically? And then separately how are you thinking about the go-to-market strategy and programming budget going forward for Showtime, is the range of 10 to 15 originals a year in the ballpark or does that need to be stepped up?

Robert M. Bakish

Yeah, sure John. So on your first question, I'd start with the fact that ViacomCBS is a critically important content supplier to the MVPD ecosystem. Why do I say that? We do have a number one linear portfolio on share and we do lead on a range of key demographics. Within that we have must have content including sports, including the NFL. Beyond that, we have a really broad opportunity to work with them to create value. And you see that, for example, as we deploy our assets in the advanced ad space and we have advanced ad partnerships with most of the large MVPDS at this point. And more recently, we've become a supplier to the app space, with both free and paid streaming products, and we supply those to both their set top box and their broadband only infrastructure, things like Flex. So that gives us even more to work with. And you look at 2020 and you look at through the first quarter of 2021 and you see that we're using that asset base to consistently close deals, deals with companies that are formidable, the likes of Comcast, Verizon, YouTube, Hulu. And when you take the contractual -- when you take that, and then you combine the contractual rate inclusive increases for deals that are in flight, you've seen that drive affiliate growth in incremental distribution in linear.

So it's a powerful combination. As we look forward, including to a world as you described with did you see [ph] Paramount+ growing etc. We like our position, we are among the most important content suppliers in the industry, we know how to get deals done. The addition of streaming, including Paramount+ gives us even more to work with. And remember, that helps us drive value for those customers and simultaneously helps them evolve their business, as consumers increasingly embrace broadband versus say Set Top Box. And our ability to do that, in turn drives real revenue and asset value for ViacomCBS. So yeah, negotiations might be a little more complicated than they have been in the past but I feel very good about our asset base. We have the best affiliate team in the business. And I feel great about the outlook of our partnerships with MVPDs.

To your second question, Showtime. Showtime, is on a really nice roll. It produces great content and as we look at the segmentation of the consumer in the United States, there's no question that there's a significant market for a more upscale, more coastal, more R rated offering. That's what premium is. And as you saw, Showtime really continued it's great run in the first quarter. It had the top two scripted premium series with Your Honor and Shameless. It had record OTT sub growth and growth in total subscribers and it's had record engagement. So it's working. The fundamental driver here is content, originals in particular. Again, Shameless and Your Honor in the first quarter.

Movies are important too, as they always have been in the premium category. As we look forward with Showtime, because it is part of your question, we like our slate. We currently have about 10 or 12 ten poll series per year and we support that or package that with three to five kind of lower cost original series. You look what's coming, it's the Return of Dexter, it’s the Return of Billions, a new series called American Rust with Jeff Daniels, a new series called Yellow Jackets with Juliette Lewis and Christina Ricci, that's pretty hairy kind of series. It's about a plane crash in Latin America and a girl soccer team and kind of what happens in that. We're doing a great project on First Ladies. You could think quasi crown of the U.S. and then starting with the Viola Davis playing Michelle Obama. Really excited about that. We're going to do a Ray Donovan movie. So the list goes on and that product by the way is not only good for Showtime in the U.S. where it'll continue to drive engagement and performance in the category but it's also going to increasingly benefit Paramount+ outside the U.S. where Showtime product is an integral component of the offering. By the way, the movie outlook is good for Showtime too and we have optionality in house. So we're feeling great about Showtime, both standalone and as an integral part of ViacomCBS, including in streaming.

So with that, in closing, I just want to say a couple things. Clearly, very exciting times at ViacomCBS. We have strong operating momentum, we have amazing content, and we have a streaming strategy that is really delivering. You see all of that in our first quarter and it really positions us well moving forward. As management, we have a focus on value creation and delivering for our shareholders. That's true overall and certainly with respect to streaming, as we build on these strong early results and momentum, particularly with respect to Paramount+. It's a differentiated product, it's a product with real competitive advantages, and we're investing to deliver on its promise. So thank you for your time today. Thank you for your support. We look forward to continuing the dialogue as we execute and deliver on the ViacomCBS growth opportunity. And finally, I'd like to thank all the ViacomCBS employees for all they do every day to drive our company forward. Stay well, everyone.

Anthony DiClemente

Thanks, Bob. And thank you all for joining us. That concludes our earnings call.


Thank you ladies and gentlemen. That concludes today's conference. You may now disconnect your lines and have a wonderful day.


From TheWrap:

Paramount+ and Showtime Combine for 36 Million Global Subscribers

ViacomCBS platforms are up 6 million subs from the end of February

ViacomCBS hit 36 million global subscribers combined between its streaming platforms, primarily Paramount+ (formerly known as CBS All Access) and Showtime OTT, in the first quarter of 2021, the company reported Thursday.

That’s up from the 30 million subscribers worldwide that ViacomCBS said it had across CBS All Access and Showtime on Feb. 24, just ahead of the March 4 rebrand of CBS All Access into Paramount+.

Meanwhile, Pluto TV now has nearly 50 million monthly active users (MAUs) globally, rising from the 43 million ViacomCBS reported at the end of February.

Per ViacomCBS, its Paramount+/Showtime OTT subscriber growth in the quarter, which ended March 31, was led by Paramount+, where “the biggest drivers of sign-ups were live sports and specials, including the Super Bowl, NCAA Tournament, UEFA Champions League, Oprah with Meghan and Harry and The Grammy Awards, as well as kids’ content, including programming from the SpongeBob universe and iCarly, and original programming, including The Stand and Star Trek: Discovery.”

ViacomCBS’ says its original programming, content from cable brands and Paramount movies drove “almost half” of Paramount+ subscriber engagement. And globally, Nickelodeon programming was an even more “significant” factor in signups and engagement.

Meanwhile, Showtime OTT “delivered its best quarter ever in sign-ups, streams and hours watched,” according to ViacomCBS, a record attributed to streaming of original series “Your Honor” and “Shameless.”

ViacomCBS did not break out domestic Paramount+ and Showtime OTT subscribers, a mark they said was at 19.2 million on Feb. 24. That same day, ViacomCBS said it expected to reach 65-75 million global subscribers between Paramount+ and Showtime by 2024.

ViacomCBS revealed its new streaming subscriber numbers along with its first-quarter 2021 earnings Thursday. In those results, the company said its streaming revenue rose 65% versus Q1 2020. Streaming ad sales were +62%, driven by advertising on Pluto TV, Paramount+ and other digital video platforms, and streaming sub revenue was +69%, reflecting +63% growth in global streaming customers.



From Variety:

‘SpongeBob’ and Nickelodeon Shows Drive Paramount Plus Subscriber Growth

Nickelodeon has emerged as one of the most popular content hubs on Paramount Plus, offering ViacomCBS a flashback to the good old days when it dominated the linear cable kids TV business.

The stickiness of Nickelodeon content is a sign that the strategy of expanding the CBS All Access streamer with the Paramount Plus relaunch on March 4 was the right approach, ViacomCBS CEO Bob Bakish told Wall Street analysts Thursday during the company’s first quarter earnings call.

“The real news is it’s now broader,” Bakish said of the subscriber base for Paramount Plus in the 10 weeks since the relaunch. “Nickelodeon is turning into a powerful driver of subscribers and engagement,” he said noting that Nickelodeon shows such as “Paw Patrol” account for “a strong double digital share of total streams.”

ViacomCBS primed the pump to attract pint-size viewers and their families by making the “SpongeBob Movie: Sponge on the Run” available starting with the March 4 launch. That decision was made in part because theatrical distribution was essentially shut down during the worst of the COVID-19 lockdown. The new “SpongeBob” spinoff series “Kamp Koral” also debuted in tandem with the launch.

“That’s a recipe that clearly works,” Bakish said. “Here is an example of us replicating our strength in a legacy linear position here in kids in streaming.”

The majority of the 70-minute call was devoted to ViacomCBS’ streaming investment and the pace of growth at Paramount Plus. Bakish and CFO Naveen Chopra made it crystal-clear that the company is focusing its energy and resources to producing more original content to be showcased on the domestic and international iterations of Paramount Plus.

The service will be in 45 worldwide markets by the end of 2022. As of Thursday, ViacomCBS counts 36 million global streaming subscribers, most of which are in the U.S., across its Paramount Plus, Showtime and BET Plus services.

“I look at the international streaming opportunity. It’s clearly global and we’re going after it,” Bakish said. He emphasized ViacomCBS’ benefit of having a local presence in key territories like Latin America. ViacomCBS owns Argentina’s broadcast giant Telefe and last month it inked a deal to buy Chile’s Chilevisiòn. Both of those entities will be vital in supplying Paramount Plus with content for Spanish-speaking audiences.

“We’ve got a lot of content to work with outside the U.S. for Paramount Plus and a lot more is coming,” Bakish said. “The other differentiating piece here is on the ground operations. That brings us significant advantages in unlocking the opportunities in these markets.”

Chopra noted that as existing international output deals expire, “we will further reduce the content we license to third-party streamers, holding more for in-house,” he said.

Chopra made multiple references to the $2.7 billion that ViacomCBS raised in March as its stock went on a run — that turned out to be tied up in the flame-out Archegos Capital Management — designed to give them flexibility to invest in more content. That includes plans to have more Paramount Pictures titles launch earlier on Paramount Plus and to build up to one original movie per week for the service by next year. Next month, another 1,000 Paramount library titles are coming to the streamer to bulk up the movie menu on the streamer (“These are real movies, not deep library,” Bakish enthused.)

Paramount Plus will add a $4.99 ad-supported option next month to its existing $9.99 offering. Bakish noted that there’s potential for average revenue per user for ViacomCBS to be greater on the lower-cost version of Paramount Plus because streaming ad inventory is so in demand.

ViacomCBS’ free ad-supported streamer Pluto TV also continues to be a workhorse and important supplier of ad inventory. “Pluto TV revenue has now doubled for the third sequential quarter,” Bakish said. ViacomCBS’ streaming advertising revenue in total spiked 62% year-over-year to $428 million, powered by growth at Pluto TV.

Pluto TV now has 150,000 hours of content from 250 suppliers. The service saw a gain of 6 million monthly active users in during the quarter, bringing its base to nearly 50 million.

“The top of the funnel continues to be robust,” Bakish said.


Paramount+, Showtime OTT Log 36 Million Combined Subscribers Globally

It’s a streaming world at ViacomCBS as the media company reported that its upstart Paramount+ SVOD service (formerly CBS All Access) and Showtime OTT subscription streaming video platforms had a combined 36 million subs worldwide through the first quarter, ended March 31. That’s up 6 million subs since the previously-reported period.

ViacomCBS did not update total domestic Paramount+ and Showtime OTT subscribers, which ended Feb. 24 with 19.6 million combined members. CBS All Access became Paramount+ on March 4.

On Paramount+, the biggest drivers of sign-ups were live sports and specials, including the Super Bowl, NCAA Basketball Tournament, UEFA Champions League Soccer, “Oprah with Meghan and Harry” and “The Grammy Awards,” as well as kids’ content, including programming from the SpongeBob universe and iCarly, and original programming, including “The Stand” and “Star Trek: Discovery.”

Original programming, content from cable brands and Paramount movies drove almost half of Paramount+ subscriber engagement. Globally, Nickelodeon programming was a significant driver of sign-ups and engagement on Paramount+.

Next up for Paramount+ is Australia, which launches there on Aug. 11, featuring Paramount movies, Showtime, and Paramount+ Originals, in addition to a cross-section of product from cable brands and Network 10.

“By the end of 2021, we’ll have launched subscription streaming services led by Paramount+ in 25 markets,” ViacomCBS CEO Bob Bakish said on the fiscal call.

Showtime OTT delivered its best quarter ever in sign-ups, streams and hours watched, driven by originals, including “Your Honor” and “Shameless,” as well as theatricals.

Separately, AVOD platform Pluto TV saw monthly average users increase to nearly 50 million, adding 6 million global users in the quarter. Pluto TV’s international expansion has continued, launching in France.


ViacomCBS Adds 6M Global Streaming Subs in Quarter, Driven by Paramount+, to Reach 36M

The entertainment giant, led by CEO Bob Bakish, reported higher first-quarter advertising revenue as its latest financials exceeded Wall Street expectations.

ViacomCBS added 6 million global streaming subscribers in its first quarter, “driven by” the rebranded Paramount+ service, to reach 36 million global paid streaming users, the entertainment company said Thursday.

The company, led by CEO Bob Bakish, shared the latest user data in its earnings report for the first quarter ended March before the market open, as management on an earnings conference call with Wall Street analysts later said that the “significant majority” of new users were for Paramount+ and the “significant majority” of those were domestic customers.

The firm was created in December 2019 via the recombination of Viacom and CBS Corp. Its paying streaming services are led by the former CBS All-Access, which showed this year’s Super Bowl, that beefed up and rebranded in the U.S. on March 4 as Paramount+, and Showtime OTT. They and smaller services had reached nearly 30 million global subscribers as of the end of 2020, with Wall Street analysts on average forecasting 4.8 million new users for the first quarter, which the firm exceeded.

Advertising-supported streaming service Pluto TV also added about 6 million users worldwide, with growth in the U.S. and in international markets reaching nearly 50 million monthly active users as of the end of March.

For Paramount+, “the biggest drivers of signups were live sports and specials, including the Super Bowl, NCAA Tournament, UEFA Champions League, Oprah With Meghan and Harry and the Grammy Awards, as well as kids’ content, including programming from the SpongeBob universe and iCarly, and original programming, including The Stand and Star Trek: Discovery,” ViacomCBS said. “Original programming, content from cable brands and Paramount movies drove almost half of Paramount+ subscriber engagement. Globally, Nickelodeon programming was a significant driver of signups and engagement on Paramount+.”

Showtime OTT “delivered its best quarter ever in signups, streams and hours watched, driven by originals, including Your Honor and Shameless, as well as theatricals,” the firm added.

Wells Fargo analyst Steven Cahall had forecast 3.5 million Paramount+ net user gains in the first quarter “driven primarily by sports” and 4.3 million global subscription VOD subscriber gains to 34.2 million. He had also projected a gain of 6.4 million Pluto users to 49.5 million monthly active users. “We view sports content such as March Madness, the Super Bowl and the Masters as being most impactful to net adds,” he wrote.

“We accelerated our expansion in streaming with the launch of Paramount+ further enhancing ViacomCBS’ ecosystem of premium, pay and free services,” said Bakish. “Our early momentum in streaming is a testament to the breadth and relevance of our differentiated offerings, as well as our opportunities for growth through Paramount+, as we continue to ramp the availability of live sports, original series and blockbuster movies over the course of the year.”

On an earnings conference call, Bakish said the streaming momentum in the first quarter gave management even more confidence in its streaming strategy.

And he said a recent deal to raise $2.7 billion in capital would help the company’s streaming and broader content push. CFO Naveen Chopra said the capital raise would help take streaming “to the next level” with such priorities as the funding of “more original series and movies exclusively for streaming,” incremental sports streaming rights and an acceleration of international launches and market expansion.

Paramount+ will be available in 45 markets by the end of 2022, management said. Chopra also said that the company would “further reduce the amount of content we license to third-party streamers, instead preserving more of these assets for our in-house streaming services.”

Bakish also touted the broad appeal of Paramount+, including thanks to kids and family content from Nickelodeon. “Nickelodeon is turning into a powerful driver of subscribers and engagement,” he noted, explaining that it accounts for “a strong double digital share of total streams,” but “nowhere near half.”

Bakish said a planned $4.99-a-month version of Paramount+ with advertising, which will launch in June following March’s launch of the $9.99 ad-free version, will broaden the portfolio of service offerings to consumers, including cost-sensitive segments, and distribution partners, adding “another arrow in the quiver” for the firm’s streaming business.

ViacomCBS also posted a first-quarter advertising revenue gain of 21 percent, excluding streaming, to $2.68 billion on Thursday as it changed the metrics it reports. It also detailed its affiliate revenue and streaming revenue, which had previously been included in ad and affiliate figures. Affiliate revenue grew 5 percent in the latest quarter to $2.08 billion, while streaming revenue rose 65 percent to $816 million. Total quarterly revenue grew 14 percent to $7.41 billion.

Net earnings from continuing operations for the opening quarter of 2021 jumped 79 percent to $899 million, while adjusted earnings on that basis grew 39 percent to $961 million.

On the earnings call, Bakish touted streaming subscriber, usage and engagement momentum, citing that Paramount+ watch time for active subscribers was up 17 percent over the year-ago period, and the benefits of the Viacom-CBS merger, saying ad trends were improving as the economy opens up from COVID-19 restrictions.

For the current second quarter, Chopra forecast double-digit ad growth “as demand continues to improve” and scatter ad market prices are at all-time highs.

Overall, ViacomCBS’ quarterly financials exceeded Wall Street expectations, and its stock rose in early market activity.

ViacomCBS shares have had a volatile year. After crossing the $100 mark, they dropped sharply after the liquidation of hedge fund Archegos Capital Management. But various Wall Street analysts have as of late gotten more bullish on the stock.

MoffettNathanson analyst Michael Nathanson recently upgraded it to “neutral.” He also raised his first-quarter forecast for earnings before interest, taxes, depreciation and amortization to a 20 percent gain over the same period of 2019, from 15 percent. He cited affiliate fee growth, but cut his quarterly advertising revenue estimate to a 4 percent drop, citing “more challenging viewership trends.” Noted Nathanson: “In terms of viewership, Viacom’s portfolio of cable networks was down 18 percent in the first quarter, with TeenNick, Nicktoons, Nickelodeon and VH1 performing especially poorly.”

In ViacomCBS’ film unit, first-quarter revenue grew 23 percent to $997 million, “reflecting growth in licensing revenues partially offset by a decline in theatrical revenue,” which was “immaterial” due to  the “closure or reduction in capacity of movie theaters in response to COVID-19.” Licensing and other revenue increased 55 percent thanks to licensing of programming to Paramount+ and third parties, as well as revenue from the licensing of Miramax titles. Adjusted operating income before depreciation and amortization (OIBDA) in the film division increased from $27 million to $204 million, “primarily due to higher licensing revenue.”

ViacomCBS’ cable networks unit grew quarterly revenue 14 percent to $3.26 billion, “driven by growth in licensing, as well as higher streaming advertising and streaming subscription revenue.” Ad revenue here fell 7 percent, “largely because of a decline in domestic advertising, partially offset by higher international advertising.” Affiliate revenue rose 3 percent despite pay TV subscriber declines. Streaming revenue grew 70 percent, “fueled by advertising revenue growth from Pluto TV and other digital video platforms, as well as growth in subscribers for subscription streaming services, including Showtime OTT, BET+ and Noggin.” Adjusted OIBDA in the unit increased 49 percent to $1.18 billion driven by the higher revenue.

TV Entertainment unit revenue in the first quarter climbed 19 percent to $3.51 billion thanks to CBS’ broadcasts of tentpole sporting events and subscriber growth at Paramount+, partially offset by the timing of licensing. Ad revenue jumped 40 percent, “reflecting CBS’ broadcasts of Super Bowl LV and NCAA Tournament games, partially offset by lower linear impressions.” Streaming revenue rose 58 percent, “primarily due to subscriber growth at Paramount+ and Super Bowl LV digital advertising.

Adjusted OIBDA in TV Entertainment fell 22 percent to $449 million, though, reflecting “investments in Paramount+.”

Mergers and acquisition were also a topic on Thursday’s earnings call, with Bakish saying a recent deal to acquire WarnerMedia’s Chilevisión and its Spanish-language content library and production capabilities would further boost ViacomCBS’ Latin American reach and production business.


Presentation slides via Seeking Alpha; Additional sources: Anime Superhero Forum /@SweetShop209, Kidscreen.

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