Paramount+ Sub Growth Remains Robust; DTC Expansion Offsets Weak TV and Studio Results

Paramount posted a decent start to an already turbulent 2022 as Paramount+ and Pluto delivered strong growth, with 6.8 million net subscriber additions and a 3.1 million increase in monthly active users, respectively. The growth at Paramount+ was impressive given the losses at Netflix this quarter. Total revenue fell slightly due to the tough comp against broadcasting the Super Bowl in 2021, but the firm’s direct-to-consumer, or DTC, growth engine expanded its top line by 82%, with strength in advertising and subscription. Paramount has debuted a new segment structure that separates its streaming efforts from the legacy networks and studios. We expect top-line growth over the near term to be driven mostly by the expansion of the firm’s DTC segment. We maintain our fair value estimate of $58.