Q4 2021 ViacomCBS Inc Earnings Call

February 15, 2022

Why because.

Because we are on the offense and we are reaching for new Heights.

Today, we will show you that with the power of our people the power of our content and the power of our platforms. We are built to grow to drive shareholder value and to lead our industry forward.

Two years after we brought together Viacom and CBS and one year since we last convened we are keeping our promises we are consistently outperforming our goals ahead of schedule.

From growth in our subscriber base to growth and brand recognition and growth in operating revenue.

We are doing it all faster than anyone expected and we are delivering win after win after win.

This does not happen by accident, we are winning with one team loaded with talent creativity and expertise and one integrated company that is greater than the sum of its parts.

We are winning with hits that connect with audiences across all demographics and in markets around the world.

And we are winning with our unique differentiated streaming services and free pay and premium.

And of course, I have to give a call out to power Mon plus which in less than a year has established itself as the leading brand in the industry.

Our strategy has always been to harness the strength of our traditional business to build something new with our world class content fueling our growth.

This is what sets us apart as a company and positions us to succeed.

We are making the right investments in the right content in the right places.

And we are confident based on our track record of successes over the past two years that we can deliver the return on investment that you expect and deserve.

We have set in motion a virtuous cycle.

Our legacy business powers, our transformation and our transformation enhances and expands our legacy.

We have so much to be proud of so much to be optimistic about and we are just getting started.

The opportunity we see ahead across all brands is my Dad's vision come to life.

One powerful company that creates content that keeps audiences wanting more.

And Paramount was always at the core of this vision.

For more than 100 years, Paramount Studios has been known for cinematic excellence.

But paramount is also an idea.

Promise to be the best it.

It is the idea that inspired us to bring together the best in entertainment across C. B S. B E T MTV, Nickelodeon Showtime and more.

And it is the idea that inspired our businesses and our brands to define and redefine entertainment again and again for generation after generation.

Indeed, Paramount has always represented brilliant storytelling for audiences around the globe on the big screen, the small screen and every device in between.

It is what we are it is who we are and it is who we are destined to be.

And that is why today, we are thrilled to announce that Viacom CBS has become paramount global or simply Paramount.

This afternoon, we invite you to take a closer look at how far we've come.

Where we are going and most importantly, how we plan to get there.

We want you to take note of the extraordinary progress we have made over the past two years and all the momentum we have gathered.

And know that there was no higher priority for us and no higher priority for me than unlocking of maximizing value for all of our shareholders.

As I said I have never had more reasons to be excited about the future of this company.

Power a month and now I am proud to introduce our president and CEO Bob back ish.

Yeah.

[music].

For Mt.

Electronic peak of Paramount represents our history as pioneers of the Golden age of Hollywood.

Today as we embrace this powerful name were also pioneers of an exciting new future.

And with the momentum we have Paramount is already reaching new heights.

For more than two decades, now I've witnessed the power of Paramount and all it represents.

I'm sitting in for example, the global impact of Paramount Group, Inc. Films like the mission impossible franchise, which sold out time and time again and theaters all around the world.

I've seen during my international years, how the Paramount channel quickly became among our biggest blended networks in the markets outside the United States.

And I've seen more recently the audience expanding impart the spike being rebranded as the Paramount network in the U S. Thanks to movies, a megahertz like Yellowstone and more.

And now I think we'll see more and more every day the incredible momentum of Paramount plus our flagship streaming service.

Our momentum is building and as it grows and we take Pernod plus and all other student businesses to the next level.

The size of the opportunity. We see ahead is matched only by the scale of our ambition to seize it.

We can't talk about our momentum without talking about streaming.

Just look at the facts.

On a paid streaming platforms, we just wrapped our best quarter ever for new subscribers and stopped our company added 9.4 million new streaming subscribers in Q4 alone 80% of them on Paramount plus.

And on Pluto TV, our free AD supported streaming TV platform, we delivered out of this world results as well.

Pluto gained a record 10 million monthly active users in Q4.

Blood and its reach to an audience of nearly 65 million monthly actives.

And for full year, 2020 one.

And over a billion dollars in revenue almost five times, what it delivered just two years ago.

When it comes to realizing our streaming goals, we're moving fast and gaining even more speed.

Already we are one full year ahead of schedule post them subscriber results. We didn't expect to see until next January and by the end of 'twenty 'twenty. Two we're on track to hit our 2024 subscriber goal two full years ahead of schedule.

This momentum has us leading the industry on multiple fronts.

Q4, we had the fastest subscriber growth in streaming.

Poodle TV continued to leave its category both in <unk> and revenue.

Furthermore, Pernod plus was named the fastest growing brand of 2021 not just in streaming mind, you, but in any industry.

And it's not just streaming where we see this momentum we're firing on all cylinders with number one hits across theatrical broadcast cable and streaming.

In Q4 alone we had the top four entertainment programs on all of television with CBS as Ncis, the equalizer enough B, all and Paramount networks Yellowstone.

And we are number one shows across countless categories, including the number one comedy with young Sheldon and the number one news program in 60 minutes. The number one kids show and Nickelodeon Paw patrol the number one competition reality show on cable with MTBE is the challenge the number one premium show shut Showtime's Dexter new blood.

And this quarter, we became the first studio with two number one films at the box office with screen and Jackass forever.

Both of which will debut on Paramount plus in March.

And as we look ahead powered by our phenomenal Paramount content engine, we see a huge global opportunity in streaming.

Much larger potential market that can be captured by television and film alone.

We're excited about that opportunity.

And our ability not just to compete but to thrive and thereby create significant value for both consumers and shareholders.

Why because we have a differentiated playbook for streaming success, one that leans into a particular strengths that we are broad and broad in four key ways across our content, our streaming business model, our mix of platforms and our global reach.

This breath positions us to access a larger accessible market penetrated more quickly and do it all efficiently and sustainably.

So let's break that down.

Starting with our binge worthy buzzworthy content, that's not just rich and deep broad and varied.

On Panama, plus we take the plus seriously.

We're home to the most diverse content offering in streaming.

That enables us to serve the whole household every generation from grandparents, who equipped by the Godfather Winter premiered in 1972, two preschoolers who are just as excited about paw patrol the movie in 2022.

And we don't just serve the whole household we serve a whole country coast to coast recapture a broad range of households by income and geography.

And increasingly that's the model, we're applying all over the world cleared in hips and more than a dozen languages.

Over the next year, you'll see us building on that foundation, expanding our success across key genres range scripted and unscripted sports news and events kids and family and movies of all kinds.

And speaking of movies I'm pleased to announce that starting with our 2024 releases Paramount plus will become V streaming home for all new Paramount movies following their theatrical runs.

You'll see a similar breadth in our streaming business model the second source of our advantage.

We're proud of our strength in both pay and free streaming, including leading the U S market and free AD supported streaming TV with Pluto TV.

We meet consumers, where they are at serving different segments in different ways and reaching a larger total addressable market in the process.

And with the benefit of dual revenue streams in both advertising and subscription were maximizing the revenue pool.

We can the largest addressable market goes right to the heart of our third advantage, our broad set of platforms spanning linear TV theatrical and streaming.

Some see our legacy in each of these platforms as a hindrance on our streaming class.

We see it as exactly the opposite.

Paramount's reach recognition and relationships are core reasons why our streaming strategy is working our existing platforms allow us to launch and grow shows and fandoms for streaming to help us.

Promote and make the most of our content investments across platforms.

Increase the range of value, creating commercial partnerships, we can build.

And they drive our ability to scale quickly for the future.

And that's important because the future is global.

The breadth of our global reach as our fourth source of competitive advantage.

Some companies only license outside the United States.

We operate.

We have been a truly global operating company for decades with teams on the ground in more than 30 markets and we have the studios the franchises the talent and the production capabilities to move global audiences with locally relevant content drew.

Driven by more than a dozen production hubs around the world.

We're poised to replicate this success to an even bigger bolder affect in streaming.

Now, we know being broad isn't an amendment itself.

What matters is the being broad as a means of capturing significant financial benefits.

It's a means of maximizing our streaming revenue and accelerating its growth. It's a means of leveraging investment more effectively and running operations more efficiently. It's.

It's a means of moving further faster than ever before and turning streaming into a sustainable business for the future.

I know this we are committed to that future to creating that value.

We know the opportunity that hand is massive and we've got the passion the ambition and the discipline to deliver.

As of today, we're raising our guidance signaling our conviction that consistent execution of our strategy will deliver performance to match.

In fact, we anticipate reaching 100 million subscribers by 2024 compared to the $65 million to $75 million, we shared last year.

Levine will expand on this and much more in his presentation.

And to set the stage our colleagues are about to show you exactly how in every way, we're raising the bar for ourselves setting our ambitions higher than ever before.

In closing, let me just say how proud I am of the progress our teams across the company have made and.

And I'm equally excited about the new heights that lie ahead for Paramount.

When we spoke to last year.

Some of you thought we were on an impossible mission.

But today as you can see it's not only possible it's happening.

Here to share more as someone who knows a thing or two about making the impossible possible.

Please welcome the one and only Tom cruise.

Yeah.

[music].

Yes.

[music].

I'm, Tom Ryan President and CEO of streaming.

Olivia acrobatics, Tom cruise, but I do want to talk about strategy for the expansion and evolution of Paramount plus.

Let's start with our expansion, where we're leveraging our global footprint to bring Paramount plus to new markets with enormous potential.

In just one year, we launched the service in 25 markets across Latin America, Canada, and Australia, and a 2022 we're building on that momentum expanding to some of the biggest markets in the world.

We'll launch in the U K, South Korea, and the Caribbean by this summer and will continue with a focus on Europe , Italy, Germany, France, Switzerland, and Austria in the second half of the year.

To scale, most effectively we're creating customized go to market plans for each region with tailored partnerships marketing and distribution strategies and even product offerings.

We're deploying hard bundles, where we work with a local provider to give their customers immediate access to Paramount plus.

As well as the direct to consumer and Ala Carte distribution, where sometimes a hybrid of all three.

We're taking the annual plan, we rolled out in the U S and expanding it internationally.

At the same time, we're creating brand new offerings like mobile only plans for markets, where value is key and mobile devices dominate streaming consumption.

To do all of this we're leaning on our longtime global presence and a vast network of relationships with partners all over the world.

Last year, we doubled down on strategic partnerships closing deals with T mobile in the United States and Sky in Europe to name just two examples.

Today, we're proud to announce a new partnership this one in France with can help loose one of the largest providers in the market.

Through this hard bundle partnership can help lose subscribers will get access to Paramount plus immediately at launch, allowing us to gain a big foothold and a strong launch pad.

These kinds of partnerships and hyper tailored strategies will help us continue to scale quickly and economically.

Reinforcing our competitive position.

Across our streaming services and Sky Showtime are innovative joint venture with Comcast that says territories encompassing 90 million homes, primarily in eastern Europe will be in more than 60 markets by the end of the year with more than 60 partners.

Beginning in 2023, we'll turn our sights to Asia Africa, and the Middle East building on our momentum to bring Paramount plus to every region of the world.

Our global expansion underscores an important lesson of streaming the stories, we create are only as powerful as the audience. They reach.

So in addition to expanding the service to more people. We're also enhancing the service itself.

We're constantly asking ourselves how do we make this experience better smoother more personalized not just how do we serve users how do we delight them.

Just a year and we've made tremendous strides.

We continue to serve a broad diversity of tastes through programming, that's tailored to the individual and personalized with a distinct editorial voice.

Increasingly viewers are spending more time streaming outside of our top titles and watching a greater variety of series and movies each month.

And we're continuing to innovate.

We've revamped our brand hubs and introduce collection pages.

So we've used innovations from across our platforms to create an even richer experience on Paramount plus.

With Pluto TV for example, we pioneered leaned back linear channels that allow users to simply fall into a shell.

It's easy entertainment that demands nothing of the viewer because our programming team does the work in.

And it drives effortless discovery and engagement, bringing the best of our deep catalog to the floor.

Now, we've launched 20 linear franchise and genre channels in the U S. On Paramount plus so if you love animation or TV classics, you can jump straight in and discover something new.

Just a few weeks in the adoption of linear channels has grown quickly and the people who use this feature are spending 40% more time on the service than they were before.

Simply put viewers are more easily finding content to love.

Our goal with these product enhancements is to give people every reason to explore and enjoy the full breadth of our content on Paramount plus to make the experience. So engaging it becomes part of your daily routine.

So let's talk about how we're helping subscribers access even more of our amazing amazing streaming services right there in the Paramount plus app.

Our existing bundle of Paramount plus and Showtime has performed very well out of the gate.

Because users can access to premium content offerings with streamline sign up but viewed in distinct apps.

Starting this summer, we're making showtime even easier to access in one app experience. The Showtime service will still be available separately, if that's your preference.

But within Paramount plus it will be seamless to sign up for Showtime and easier than ever to discover great shows.

You'll be able to simply upgrade your paramount plus subscription to a bundle that includes the Showtime service and then view all of that content in a single single user experience.

And then when you're done watching mayor of Kingstown, you'll be able to move immediately to the next season of billions without ever leaving the Paramount plus app.

Less than a year after launch, we're expanding into new markets and making our products easier to explore and more seamless to operate and it's all for one reason to build a home worthy of our content.

To tell you more about our global content strategy. Please welcome our Chief programming Officer, Todd here Giles.

Yes.

[music].

Thanks, Tom.

Good thing you're building a worthy home because our content is unrivaled on Paramount plus we've got something for everyone take a look.

In this moment I feel like anything is possible.

You have a mission to bring us forward.

And you will make the path by traveling.

And in this new World all of them will go where no one has gone before.

And from what I see.

I am honored to be in your company.

Yes.

We begin with breaking news.

We don't change the world.

Showtime.

Yes.

Okay.

Yeah.

Okay.

Sure.

Sorry.

Thank you Amrita and insurance.

Yeah.

Please.

People.

I need you to produce pig iron.

Okay.

Exactly.

Maybe.

Okay.

That's a mountain of entertainment.

In fact, as Bob mentioned, we have the broadest diversity of content of any streaming service out there we've got movies kids and family programming news sports and events unscripted television adult animation and scripted shows of all types are Q4 growth didn't come from one or two of these lines ever.

Every single Lane helped deliver those subscribers.

Just look at the top 10 acquisition drivers from last year.

Movies Sports drama comedy Kids. These are the titles that draw people to the service.

And when we look at what keeps people engaged the range gets even broader.

Reality shows with tape libraries and original series in franchises that give fans more of what they love.

As Bob said, our content reaches audiences of all ages coastal and central streaming obsessed and streaming curious across the U S and around the world.

We are super serving the whole household from preschoolers to rapid sports fans to news junkies.

When more people in a given household watch more shows those subscriptions only get more valuable the more profiles and I'll count has and the more titles watched the higher the retention and the lower the churn.

And much of our growth is coming from those hard to reach younger audiences, where there is enormous potential.

We serve the whole country too with the broadest range of households by income and a geographic spread that covers not just the east and west coast, but the center of the country, where paramount plus over indexes compared to other streaming services.

Now the breadth of our content is just one piece of the puzzle.

Through the breadth of our platforms.

Meet users wherever they are spending their time, whether that's a big theatrical release linear TV AD supported streaming or social media and use those opportunities to cross promote and introduced our content to new audiences.

18, 83 for example is a runaway hit and not just because it's totally gripping entertainment, we put the full power of our company behind it we started with Yellowstone and one of the most popular series of all time.

To capitalize on its built in fan base, we leveraged our platform's linear and streaming free and pay sampling 18, 83 on Pluto TV and Paramount network right. After Yellowstone the same day, we released it on Paramount plus.

And that wasn't just any day, but Sunday when NFL fans were deeply engaged on the service.

Thanks to all of this and a powerful strategic marketing campaign that lead heavily on our in house assets and capabilities 18, 83 has been gaining enormous momentum week. After week, it's now Paramount pluses biggest had ever.

And I am so excited for the next chapter of this done family drama coming later this year and this is just the beginning there's so much more as you'll hear later about in the show from our creator himself Taylor Sheridan.

18, 83 is only one example of our programming strategy that leverages, the quality and breadth of our content and platforms.

And it's working the number of titles stream per user has seen huge growth quarter after quarter and year over year and users who stream original content are exploring even more than their peers.

Now, even though we're proud of where we are we are not standing still.

And you'll now hear from our content leaders as we look to the future of our programming strategy, we are doubling down on our differentiators.

First we are taking our broad content offering and deepening it with more content across key lanes building, especially on our treasure trove of IP to create lasting hit franchises.

Second we are continuing to bring viewers from show to show linear to streaming and back again across our broad set of platforms.

And finally, we are leveraging our global reach which has long been a defining feature of our company to serve international markets feed our entire global content pipeline and scale Paramount plus in the process.

Before we dive into each content Lane I want to show you just what's possible with stunning creative talent and the right strategy behind it.

An iconic franchise with vibrant characters and gripping storylines coming exclusively to Paramount plus in just a few weeks.

Hello.

In fact, we are so excited about season, one I'm thrilled to announce we are green lighting season too.

To tell you more pleased walk on the Master Chief himself Pablo Schreiber.

Thanks, Tanya My name is Pablo Schreiber and I play the iconic Super soldier Master Chief John 117.

It has been literally a dream come true to put on chiefs helmet, zellner armor and take the fight to the covenant.

Bringing this series to life has been a labor of love for so many of us for so long and.

I'm so excited to show you the results in just a few weeks.

Whether you're a SIFI geek or a diehard fan and Halo franchise.

Or if you just love great TV.

Boy do we have something for you.

Well actually.

We do have something for you.

Please enjoy a sneak peak of the Halo universe like you've never seen it before.

Let's finish this fight.

The month to take with enhance and trained for one purpose.

To win this war.

And the other stuff.

Uh-huh only effective weapons against the covenant.

Yes.

Sure.

Yes.

Uh huh.

Okay.

Mark which was recovered simply taken Hey, Taylor.

Yes.

Wanted to ask the object.

Yes.

But this wouldn't do with a superhuman do not sure you can trust.

Yes.

Can you just tell me.

Scott.

When the war.

Okay.

No.

Okay.

Yes.

Good afternoon, everyone I'm, Brian Robbins, Chief content Officer movies, and kids and family for Paramount plus Paramount Pictures films, and Nickelodeon Kids and family content are crucial to our streaming strategy last year.

Are Paramount pictures achieved new milestones for Paramount plus including a quiet place part two which in addition to being a box office success was the number one film acquisition driver on the platform in a day and day release of Paw patrol the movie the most extreme movie title.

On Paramount plus ever and what we have in store. This year is one of Paramount pictures that theatrical slate ever let's have a look.

Yeah.

Yes.

Okay.

[music].

Uh huh.

[music].

Okay.

Yes.

Okay.

No.

Okay.

[music].

Yeah.

Okay.

Yeah.

Okay.

Yeah.

Yes.

Great.

Okay.

[music].

Yes.

Yeah.

The Star Power you just saw Tom cruise, Sandra Bullock, Brad Pitt Margot Robbie Idris Elba and Jim Carrey. They are guaranteed to have audience is lining up to see these films in theaters and then these films will make their way to Paramount plus as the.

Home for the biggest must see motion pictures, but streaming a film us plug into our greater strategy, it's not enough on its own consumers expect quality.

And quantity, they expect world building and innovation and storytelling.

Mount Pictures, which is armed with so many beloved franchises recognized around the world will deliver on all of this and the home for all of our Fantastic films will be Paramount plus take the Transformers franchise from us and our partners at Hasbro is gross five.

Globally from films alone at a multiple of that at retail and we are excited that the next chapter begins with the release of the seven Transformers rise of the beef in 2023, where we're tapping into two incredible talent director, Steven capable junior and Star Anthea.

Most of this film will be the first of three installments, but before all that coming this fall we will be releasing a new animated series for kids and families from Nickelodeon that offers a fresh take on the iconic brand and in 'twenty 'twenty four will extend the franchise fee.

Further with a C. G animated transformers theatrical film with built in awareness and existing fandoms. We're replicating this success with Sonic the Hedgehog, our beloved global hero for over 30 years, now, which recently became a part of the iconic film franchises in the Paramount.

Family and on April 8th the highly anticipated sequel to Sonic will premiere in theaters and we are excited to announce today that Paramount and say here are developing the first ever original Sonic series for Paramount plus next year. This live action series will feature to character Knuckles voiced by.

It yourselves Paramount CAGR are also developing a third sonic theatrical film and all of this content will make Paramount plus the home for this incredibly popular franchise and in our cannon of homegrown franchises is a quiet place with two major hit movies, earning $650 million in <unk>.

Mobile box off the suspense of a quiet place goes way beyond just the avid family and we are excited to show you just how deep the horror guests and here's my friend, John Burzynski to tell you more about that.

Yeah.

Okay.

Thank you John .

Town like John our brands and himself with massive loyal fan bases, who will follow them from theaters to Paramount plus and over the next 24 months, that's what youre going to see from blockbusters like top gun lost city, Dungeons and Dragons and mission impossible to Babylon from Academy Award.

Ward, winning director Damien <unk> Zelle, starring Brad Pitt and Margot Robbie to the recently announced collaboration from creative Visionaries, Matt Stone and Trey Parker, the mastermind behind South Park and music Superstar Kendrick Lamar and all of these will make their way to Paramount plus and as Bob <unk>.

Said, we're thrilled that starting with our 'twenty 'twenty four releases Paramount plus will become the home for all Paramount theatrical movies now just as Paramount Pictures has established itself as the Premier studio brand for generations of audience.

Nick Allodium is kids and family with the most brand loyal audience on the planet and be cost with streaming once families subscribe. They stay subscribed viewers, who come in for kids and family content reduced churn by double digits, creating even stronger long term value.

And with 25 million U S homes with kids, two to 11 and millions of more globally and Paramount plus being one of the top providers of kids' content, well from where we sit the upside is enormous.

With the Spongebob universe, it's the number one most stream property on the platform with 13 seasons and two brand new spinoff shows camp Carl and Patrick Star plus we are announcing today three new character driven movies exclusively for Paramount plus and a bit.

The African tempo in the works, we will also usher in a new era of turtle mania for 'twenty to 'twenty three with the theatrical release of a new teenage mutant Ninja turtles movie from Seth Rogen Who's taking the property back to its original DNA of comedy and action and.

We will fast follow this series with a villain driven turtles film exclusively for Paramount plus and as we build up our homegrown franchises. We're also bringing new ones into the fold. This fall.

I am excited for Monster high where we will reintroduce these classic monsters to a whole new generation of kids with a live action musical movie and a new animated series and also a hot toy line from our partners at Mattel and later this month, we have the Paramount plus debut.

A big knee.

The first Adaptational of the best selling book series, known and read by almost any fourth grader, you will find check it out.

Because he's me.

And I'm speaking in the third person and ambition is to make middle school.

Okay.

Yes.

Excuse me a moment.

Good thing I got my breath to all we have my bet. Our friendship is the most pricing pressure.

Graeme.

Sure.

Yeah.

In France, you always keep it like that.

Three primary home.

I don't watch out because I'm going to make it.

Gotcha.

Sure.

And now when it comes to preschool it doesn't get any bigger than paw patrol. So in the wake of Paw patrol the movie success on Paramount plus we've greenlit the sequel, the Mighty movie for theaters in 2023, and we're pairing it with the first ever.

Spin off T V series of PA, and Nickelodeon and Paramount plus.

And the success in one preschool franchise has crescendo effects across the whole portfolio, which will also include these paramount plus titles a movie from Blue's clues Blues Big City adventure bowing this year and in 'twenty to 'twenty three are full length babies shark movie based on.

The most viewed Youtube video of all time, and our high rated Nick series and we're announcing today the return of Dora the explorer with a new animated series for preschoolers and a live action series in the same spirit as the recent theatrical for older Kids. So with all this great content.

Windup, we are in the best position.

Hey, Brian Hey, Miranda this is a total surprise and completely unrehearsed totally and rehearsed.

And actually close by those shooting season, two of Icarly. So I just thought I'd pop over to make sure we get a good plug in here for our show and to remind everyone. How big It was last summer on 100% I mean Icarly was the top comedy acquisition driver on Paramount plus last year. It drove billions of impressions on social media. Thanks to you and.

Like you said you are taping the new season, right now and that's because of Premier later this year, yeah, it's been such a great home coming for all of US and we're just so grateful to all the fans of the show.

Sort of enjoyed being a meme again anyway. Thanks for the plug it I've got to get back to that we're doing this whole unresolved issue thing between Carly and Freddie So thanks for indulging me and thanks again to everyone. Bryan Thanks for coming by that was awesome. Thank you Miranda I'm not only was icarly a huge hit in its own right, but it also.

So open the door for Paramount for Us to program more young adult content another huge opportunity for us the incredibly influential why a audience of $100 million 13 to 34 year olds drives three trillion in spending power. They are huge consumers of content with an average of five <unk>.

Subscriptions, each and they dominate social and their endorsement is the most effective marketing campaign you can ever imagine so for them, we're launching a full slate of why a targeted films and series powered in part by Awesomeness the studio behind the recent why.

Hits to all the boys pen 15, and the perfect day and our films include the recently released the in between starring why a icon Joey King from the kissing booth and upcoming films like honour Society, a high school comedy that's a cross between election in mean girls starring in Gary Rice.

For mayor of East town and gave Matterazzo from Stranger things and also Hush Hush based on the New York Times bestselling book series Fantasy Football from Iran. James Springhill Company, starring Marseille, Martin and the return of Mtv's Teen Wolf with a new movie featuring the original Caf.

That will set up a new world series called Wolf pack based on the acclaimed books by eight O van Balkans. So all of this.

This is just what I can squeeze in my allotted time, there's so much more so much more content creativity and innovations coming and pulling it all together paramount's legendary list our beloved IP in the high profile star power throughout our ecosystem and the generation to.

Finding hits birth by Nickelodeon all make Paramount plus the home to the biggest most iconic franchises serving everyone from preschoolers to boomers and generation X Y and Z. So if you're a fan of any of these then you must have.

Paramount plus and what's more these titles will live across films and series and consumer products fueling global fandom, and driving subscriptions engagement and retention and when it comes to global Fandoms Theres nothing like Star Trek fandom and here to talk about.

What's next in that universe is J J Abrams.

[music].

Okay.

<unk> Sky.

What's out.

The universe.

Infinite and unknowable.

That is until you gather a few shows brave enough to explorers.

Scott.

Sales of all species, who couldn't be more different coming together for the greater good and sometimes not so good sometimes you're dangling out an airlock.

On for Dear life.

Because he consulted some aliens mother in a way you never knew possible I've done that may too.

And through these adventures, both epic and humid we find coke.

For a brighter future for new frontiers for him seven in patients with the same mission.

Always.

Let's get through it.

Yeah.

Star Trek is always look to the future.

This year, we will head to the enterprises passed and the new prequel series Star Trek streams, New worlds with me as Captain Pike Wilkes.

We will explore unexpected places throughout the galaxy on adventures to get right to the heart of what makes star Trek So great.

<unk>.

The duston Sky.

As my heart.

We can go forward together knowing.

That would ever Shadows, we bring with us.

They make the light all the brighter.

We will find things the challenges.

In fragrance.

Yes.

But we do not factor.

What's the mission.

Explore.

Cool.

Yes.

[music] technique.

Okay.

Yes.

Okay.

I Love this job.

Yeah.

Okay.

Yes.

I'm, George Cheeks, Chief content Officer for news and sports on Paramount plus and this is a legendary San cero, the home of inter Milan, and AC Milan and the setting for many thrilling UEFA Champions League and Syria.

Matches, you can watch them all on Paramount plus.

We have many of the biggest franchises and live sports, it's a true differentiator for the service.

Now, let's talk about that let's hear from two voices of the most popular sport on Paramount plus from our inside the NFL studio in New York, and all time NFL, Great Julian Edelman.

And from our Champions League studio the incredible hosted the UEFA Champions League on CBS Sports Kate Abdo.

Who better to talk about the success of football on Paramount plus then one of the faces of our critically acclaimed coverage take it away.

George.

Something funny, Yeah. He said football I know you said football the frozen tundra the overrun in Georgia is actually I'm talking about the football and she can play with your Navy, but have you been watching Paramount plus then you would have seen the greatest ever played a game of football the goat I would know I played with them in place I mean, El mech queue Kate.

No, Tom Brady and with Paramount plus you'll get to watch the next generation of football's brightest stars Patrick Mahomes, Josh Allen King Henry Okay, That's nice, but our stars only need one named Ronaldo mainline and back Cowboys. The bears the Liverpool Rama grade Iron unit, Bill Belichick audio Lambeau field.

Old Trafford old tracker, what does that stadium Caf two is the stadium and the reason you and I are here to remind everybody that football yours and mine is bringing in record audiences are paramount and something that is a good thing for every agreed don't you mean soccer and football Joe's anyway, I think it's time to take a look at all of the sports apparel.

<unk> has to offer.

From the masses to the men's final fall from college football PGA tour and from the NFL The Champions League football.

I think you mean soccer right pathing tools.

While the tech.

No Dave.

Okay.

Right yes.

Sure.

Thank you.

Yes.

Okay.

Gotcha.

The other time.

Gotcha.

Yes.

Must be the AMA is Japan's first masters champion.

Okay.

Sure.

Why has touched on today.

Okay.

Yes.

Okay.

Gotcha.

Thank you.

Okay.

Like Kate Julien said, whether we're talking about football or football Paramount pluses, winning because we have something nobody else does a sports ecosystem, where paramount plus and CBS sports work together to drive subscriptions and engagement we have TV.

Most valuable property, the NFL and it's performing better than ever for us take our Thanksgiving day game more than 40 million fans tuned in making it the most watched regular season game in 31 years and the most streamed regular season game ever on Paramount plus this record breaking momentum continue.

Into the playoffs with our most streamed non Super Bowl weekend ever now in the span of just one football season. The NFL on Paramount plus has increased by 88% inactive subscribers and by 67% in minutes streamed and there is so much more to come thanks to our historic Multiplatform D.

Will that extends our relationship with the NFL through 'twenty thirty-three. We're also America's home to the world's most popular sport and look at the sheer tonnage of our exclusive rights in soccer. The 'twenty one 'twenty two UEFA Champions League season alone continues to deliver record breaking audiences for Paramount plus and we're expanding our coverage.

Internationally, Paramount plus recently landed English Premier League rights for Mexico, and Central America in.

In Chile.

<unk> plus will stream the Chilean national football team qualifying matches for the 2026, FIFA World Cup, and Paramount plus and network 10 will present, the top Australian leagues and the Australian National team matches in territory Paramount plus also is the home of the full CBS news portfolio. This includes.

Our recently rebranded twenty-four seven streaming news service that will feature new original programs from CBS is top on air News talent, a slate of upcoming documents series from leading journalists and filmmakers as well as on demand access to the networks iconic news franchises now as Bob said.

One of our key Differentiators is our broad collection of businesses from TV to theatrical working together to drive global streaming our company is the world's biggest broadcast footprint with powerhouse networks around the world, including the top rated broadcaster in Argentina Telophase the top network.

In Chile, Chile is young channel five in the U K and Australia is network test each network offers up a powerful owned marketing platform with massive reach to fuel the growth of Paramount plus.

C. B S. For example, we promote Paramount plus in every hour of network programming last year. It added up to 4 billion on air impressions and 1500 spots across CBS .

And our networks continue to produce hit after hit.

Hits it find new audiences on Paramount plus all over the world one of network tens most successful Australian drama series five bedrooms moved to Paramount plus five bedrooms is now one of the biggest shows on this service helping to drive early subscription growth in Australia, where we vastly exceeded our subscriber estimates.

Latin America. Our teams also returning local broadcast hits into Paramount plus originals like the Mega hit Master chef on telephone spinning off into hands off chef on Paramount plus.

To see the S series Evil and seal team became Paramount plus original as last year and quickly became two of the most watched original series on the service in the U S. They both have been renewed for another season and today, we're excited to announce plans for a seal team movie event exclusively for Paramount plus now.

We continue to add CBF hits on Paramount plus from dramas like F. B, I, which has vaulted into one of the services top shows to comedies like goes which is the number one new comedy on broadcast and the number one comedy series on Paramount plus from Primetime Entertainment to news to NFL on CBS .

Bottom line different audiences watch premium content in different ways, we can draw the biggest broadcast audiences and engage a unique and additive audience on streaming as we continue to grow Paramount plus and build more franchises and CBS will take are globally popular franchises and turn.

I'm into local Paramount plus originals today were announcing Ncis city are uniquely Australian spin on the hit U S show coming next year to Paramount plus in Australia. The New series will be filmed in one of the world's most scenic harbor cities. It will feature local stories and local creative talent, including Shea.

Brennan Creative N C. I S. L. A who is an Australian himself. It all adds up to the very best in live sports breaking news key entertainment franchises and broadcast networks, driving Paramount plus with audiences all around the world.

Now I'd like to pass it over to my colleague and friend Chris Mccarthy.

Okay.

Yeah.

Thanks.

Thanks, George and Hi, everyone I'm, Chris Mccarthy, the Chief content officer for adult animation and reality programming for Paramount plus and I'm excited to be here today to talk to you about both genres as well as the global power of IP adult animation and reality content share a lot in common.

The life characters outrageous situations and laugh out loud moments that resonates. They show exaggerated truth that we can all relate to and that's why they're so incredibly popular all over the world and they both hold a special place for us where credit with creating reality T V with the launch of the real World and with South Park, and Beavis and Butthead we.

Health to bring adult animation into the mainstream and around the world over 25 years ago.

And to this day, we are global leaders in both and as we accelerate our expansion with Paramount plus globally, we're doubling down.

Let me give an example.

Sure. It was an instant phenomenon when we launched it in the U S. So we franchise date with local cast all over the world without Copelco shore and REO short, we use them to launch Paramount plus in Mexico, and Brazil, and it quickly became the number one series in those markets and I'm excited to announce today that we're renewing both of those series and to further.

Already our launches globally, we're adding seven new shores around the world you.

Do you see this as one of our global competitive advantages globally, no reality IP with local cast executions. It allows us to customize our offerings in new markets with incredible efficiency now that's what I call a sure thing.

That takes me to the challenge the IP. The created reality competition is now about to create a new reality first behind me is the location in Argentina, where we're shooting the first ever globally connected competition series and because it takes place in one location, we're creating five series for nearly two thirds the cost take a look at the.

Challenge for the World.

The franchise that created unscripted competition, where sports and reality collide.

Okay.

Cut throat.

Is going to.

Global.

It's the challenge war of the worlds two part worldwide tournament with new series in four different countries. This game.

Crazy times.

We're the biggest reality athletes battle it out to be named their countries champion.

And it's all about Paramount plus and our four biggest broadcasters around the world.

Then the winners in each country advanced depart to streaming exclusively on Paramount plus also crown the first ever challenge World Champion. The next evolution of global reality competition is ear.

The challenge war of the worlds streaming exclusively on Paramount plus.

And that's just the beginning take a look at the scope and scale of what we have going on.

It truly puts us in a leadership position now, let's talk about the power of adult animation.

South Park, and Beavis and butthead or some of the most beloved and universally recognized IP in the World last year South Park was the number one adult animated series in the U S and around the world over 50 billion minutes of the show was consumed which means at any given time more than 100000 people are watching South park and I'm thrilled to say as we celebrate the 25th.

<unk> anniversary the series is coming home. It all started it last year as we launched two new streaming movies on Paramount plus which were top performers in the U S and number one in our international markets now will build on that momentum with two new South Park movies every year for the next six years and I'm excited to announce here for the first time ever that Paramount.

Plus international will become the exclusive home to the full South Park Library of 310 episodes as we launched the series this year plus starting in 2024, new episodes of the South Park series will have their U S and international stream premieres on Paramount plus followed by the full catalog coming home to the U S. In 2025.

Making paramount plus the global exclusive ASP at home to South Park now were also welcoming home Beavis and Butthead. This July with a brand new movie set 20 years into the future, which is sure to reignite the franchise for old and new fans alike, and we'll build on that momentum with a new series set in the present day. Those are just a few of the great animated project.

We are coming as we continue to build out our global IP to power Paramount Classics expansion.

Now speaking of the power of our IP to attract and capture millions of fans last year Yellowstone became a phenomenon not just in the U S where it's number one on linear but also internationally, where paramount plus is it ASP at home to build on that momentum with franchise the series and real time, starting with the origin story 18 83, it just launched into.

And it became an instinct global hit in fact as you heard earlier from Tanya, It's Paramount pluses biggest hit ever clearly, we're only at the beginning of unleashing the full potential of this IP and here to tell you more about that as a creative partner tailor Sheridan.

How do we reinvent the wheel again, what's the next thing we wanted to.

We're in an interesting time in scripted drama in TV, because everyone is attempting to find this new way in to tell a story and <unk>.

Done it with all my shows where I looked at a forgotten part of the American experience.

Taylor is an extraordinary rider I looked where he was writing an intensity to theres a urgency to it we have a lot of trust in.

And love for each other assorted so lot of good things going on.

With Yellowstone I had built out this back story of where the <unk> family came from and with 1932 I chose that moment in time to peak back in because youre seeing the children. We've met and 18 83 now attempting to raise another generation is done at a time of the wild west becoming a playground for the elite from the east.

And as far as bass Reeves goes that's a parallel world. The 18 eighties vast Reeves, who is the first African American martial west of the Mississippi policing the entire Oklahoma territories, when I'm casting I'm seeking the great actors of our generation and David or yellow is theres, a once a generation talent to look at accounting until late in <unk>.

Reeves I mean this is the guy the Lone Ranger was based on who got whitewashed out of history, but I just can't wait to get on that horse and tell their story.

I want to go get movie stars and opportunity to work with someone like Stallone. It just follows this model.

The Tulsa King is a very interesting story, if he's a lifetime gangster. He took the fall for his bosses and went to prison for 25 years kept his mouth shut and now it comes out next thing you know he's in Tulsa.

He has to start a new life create a gain because they want him to be an earner.

And that's when the fun begins what I try to do is peak is authentically into a world as I can why and this is an actual program between the CIA and special forces the truly no one knows about Nicole Kidman came to this project very early on one side written the pilot and was so moved by it she wanted to be involved as a producer we have cast as always.

So Donna and this is a deep dive in the way with which espionage and the military have blurred.

I love to explore the richest most invigorating stories and I just want to work with those people, who I've admired and with land men develop that for Billy Bob Ford. He's a crisis manager for an oil company. It's about the world of the oil business that we generally don't see when you see riding that good that really excite you.

I want to continue to make long form films that were showing in one hour increments. Paramount has the same vision that I did there recognizing that what we are creating a special and theyre, giving us the resources to do it and that's a great partner.

Okay.

Yeah.

Okay.

Yes.

Okay.

I'm, David Nevins, Chief content officer of scripted originals for Paramount plus behind me is a London soundstage, where we make the kind of global scripted originals that are helping to power Paramount plus we make shows the resonate across the country and around the world and we make them in every market for every.

Market, it's a two way street with U S made shows that we're rolling out around the world and internationally produced shows that we're bringing to the U S and markets everywhere, we are creating groundbreaking new IP, even as we lean into the franchises that fans love and we bring the highest level of acting writing and cinematography the best of Hollywood.

Everything we do the result is entertainment that's addictive, it's wood enticing subscribers and keeps them coming back for more the kind of shows you can relax with on a Saturday afternoon, or just before bedtime and the kind of shows that can fill the call for suspenseful Friday night at home take the offer one of Hollywood's wildest stories, how the iconic film.

God father, almost didn't happen, it's a riveting limited series starring miles Teller Juno Temple, Matthew Good and Giovanni Ribisi, Here's a peak.

Okay.

We want to make a movie.

Yes.

This can become Coca phenomenon.

And I actually never seen before and then we better get started.

I know how to make this film.

Metaphor.

American tree.

This is not just some gangster flu makes us look like a job and that's bad for business. This is a story about family.

It's Shakespeare agencies won't touches with sandvik, one big producers.

Steel do whatever it takes gangster movies are dead.

So actually I'm going to handle something I'm going to hand.

Sinatra wants us to shut the picture now the GAAP range.

Hi, Paul.

Ts.

Okay.

Kansas City.

Okay.

Yeah.

What is our opening line.

I believe in America.

Okay.

[music].

Next comes Greece rise of the Pink ladies a splashy musical prequel to our classic film with proven multi generational appeal, but updated for today with cutting edge music and choreography have a look at this just produce dancing.

[music].

Uh huh.

[music].

Yes.

Okay.

No.

Yes.

Okay.

[music].

Okay.

Yes.

And coming later this year, we've got Kiefer Sutherland and an edge of your seat psychological thriller Rabbit hole from the creators of the good fight and evil comes the true story of a woman who realizes her father was the infamous real life happy face serial killer and titles from the Paramount.

Library ripe for updating like fatal attraction, starring Lizzy, Caplan and Joshua Jackson for US, it's absolutely essential how well. These shows will play internationally because Paramount plus is designed for a global audience.

Tell you more about our international production plans, let me throw it over to my London colleague Maria curiosity.

Thank you David as you said Paramount plus as a truly global service in every way.

Our production capabilities span more than 20 countries from Argentina to Israel to my home here in London.

US an incredible advantage here.

Here in the U K, we are thrilled to launch Paramount plus system, bringing all our shows and movies to push audiences.

And bringing the remarkable talent that we have here to a global audience.

From a dramatization of the New York Times bestselling novel, a gentleman in Moscow Toy preschool series of the British cult hit Sexy Beast. We're excited about what's in store as we expand Paramount plus into global markets. My colleagues around the world are creating new content like our first Italian original mythology on a thriller from Germany, the chemistry of death.

We're expanding our partnerships with international groups, including C. J Entertainment, the South Korean production company behind parasite, starting with a thought provoking new drama Yonder. In fact, we already have more than 50, new international original planned here's a quick look.

And if there was something I wanted to discuss it.

Tell me what happened.

Okay.

Absolutely.

You can tell me that they come down.

Okay.

You bet.

Yes.

And what else.

Yes.

Okay.

Got it.

Yes.

Sure.

Okay.

Get them filled in a familiar sky again the needle.

Yes.

Uh huh.

As a company, we've always say become a leading producer of Spanish language content with telephony in Argentina, and the recent acquisitions TV Telecom there in our studios Tele Mexico. We premiered a raise of 5000 hours of content per year, and we use that scale to drive Paramount plus leading into hit show.

Like loss, India days, and Cecilia, which I can confirm that's been picked up for second seasons and here to tell us about the new romantic comedy at midnight is the incredibly talented Monica Barbera.

Thanks Maria.

After playing a fighter pilot by the name of Phoenix in Paramount's highly anticipated top gun Maverick with the legendary Tom cruise.

I'm thrilled to say with the family at this very moment I'm in Mexico shooting a beautiful new film with Diego Barnetta called at Midnight, which tells the story of Sophie and Alejandro too ambitious people, who meet at the right place, but the wrong time I play a career driven movie star with a seemingly glamorous life in my World Collides metallic.

Chandra who until now has lived his life according to sort out predictable plan.

It's been an incredible shoot so far and we can't wait to share with you. The magic we've gotten two experienced onset everyday thanks, Monica simply put retail great stories that transcend all countries and cultures.

Over to you David Thank you Maria as Maria said, the beating heart of what we do is tell great captivating stories stories that move us provoke us and make US think stories that you can't stop talking about and with hits like your honor and yellow jackets not to mention the huge worldwide success of the Dextra Revival Showtime has been a great produce.

Or a fear of missing out series that become worldwide sensations series, the dominate the cultural conversation and serve as a cornerstone for our Paramount plus service in markets around the world.

And as Tom said earlier. This includes U S subscribers, who will soon be able to easily access Showtime within Paramount plus looking ahead, we couldn't be more excited about these global hits in the making the first Lady and intimate view inside the lives of Michelle Obama Betty Ford and Eleanor Roosevelt, starring Viola Davis, Michelle Pfeiffer and <unk>.

Anderson take a look.

Can I ask you something.

Do you really feel that being.

Right.

Welcome to the White House.

And that's going to take some getting used to it.

Okay.

They want to turn into a blast Martha Stewart in this country.

Right.

Okay.

Thank you.

Linda Hawaii, who has a life of their own.

Okay.

Yeah.

I'll be huge question, so I'm going to be wiped out.

Yes.

The World is always going to judge us.

Okay.

But that should play out, but they can't make me somebody on that.

[music].

From the creators of billions comes another show from their universe exploring the contours of capitalism, it's super pumped the battle for Uber. If billions is about the masters of that universe Super pumped is about the entrepreneurs here's a preview my name is Travis I am the founder and CEO of Uber.

And contrary to what you might've read I'm not a monster.

Okay.

The thought is that the last set.

He willing to listen to the wise counsel I'll always listen.

But I will never take orders.

Is it legal.

The best thing about traffic says that he is willing to run through walls to win.

The worst thing about him as he thinks everything is at work.

But there is something that is going to kill over then I have to remove it Sergey Brin, Tim Cook Uber Cisco.

When we used to be the pretax.

Yeah.

My life is on the line here and all of you can believe boring.

A week.

Sure.

Okay.

And I'm.

Cited to announce there were already at work on season, two of Super pumped, which is going to be about the rise of Facebook and today. We are also ordering season seven of billions on the horizon, we have the iconic American Gigolo, starring John Byrne fall, let the right went in an adaptation of the Scandinavian Vampire saga, starring Demi and be sheer and re.

<unk> assumption was to take on the classic Patricia Highsmith mystery of an American tourists, whose visit to Italy is interrupted by accusations of murder premium shows huge stars addictive stories with global appeal.

This is what it looks like when we supercharged our content engines to create shows the world can't get enough of all on Paramount plus and we are just getting started now let me turn things back over to Bob.

As you can see across every genre lane Paramount is reaching new heights with our powerful content engine and.

And that engine and turn is creating a compelling value creation opportunity for the company.

Here to share more details on that please welcome our Chief Financial Officer Naveen Chopra.

[music] Thanks, Bob.

Hello, everyone.

This afternoon my colleagues have explained how we plan to take our flagship streaming service to new Heights.

Now I'd like to explain how that strategy is driving our financial results today and into the future.

I'll start by sharing a few highlights from our Q4 results and recapping the remarkable year, we had in streaming.

Then I'll talk about the future.

Starting with changes in our disclosures, which are important to understanding our future financial goals.

I'll explain how our differentiated streaming playbook translates to a financially attractive business with healthy long term margins.

And then well put some specifics around all of that with updates on our long term goals and expectations for 2022.

So let's start with our Q4 results.

Which are covered in greater detail in our press release, we issued earlier today.

We added $9 4 million streaming subscribers in Q4, reaching a total of $56 1 million global subscribers across our services.

Paramount plus continue to drive the vast majority of new subscribers in the quarter.

But Showtime OTT also had a record quarter of additions.

In AD supported streaming Pluto TV continued to thrive delivering its biggest quarter of M au growth by adding 10 million M. A use to reach $64 4 million M. A used globally.

In combination.

<unk> services powered a another quarter of exceptionally strong revenue growth.

Global streaming revenue was up almost 50% year over year to $1 3 billion benefiting from strong subscription revenue growth, which accelerated yet again to an impressive 84%.

At the same time, we saw continued strength in our traditional businesses with growth in both advertising and affiliate revenue.

Our balance sheet also strengthened in Q4, where we sold noncore real estate assets and ended the year with $6 3 billion of cash on hand.

Our net debt balance now reflects a $7 billion reduction since the merger of buyer com and Cvs.

And provide ample firepower to seize the tremendous streaming opportunity before us.

And speaking of streaming.

As you've heard throughout today's event.

2021 was indeed remarkable.

Less than a year since the launch of Paramount plus our content marketing and distribution engines drove explosive growth, adding more than 26 million global streaming subscribers across our platforms in 2021.

In turn streaming subscription revenue grew nearly 80%.

We know that kind of growth relies on great content to attract and retain a broad base of subscribers.

And we're seeing the formula working.

In fact, if we look at our domestic Paramount plus business as content selection expanded the average monthly active rate moved higher.

Each of the past three quarters since launch.

And as audience has spent more time with the service.

Turn also improve each quarter during the year.

And his engagement and retention increase so does the lifetime value of Paramount plus subscribers.

And to underscore what Bob and Tom shared 'twenty 'twenty. One was also an out of this world year for Pluto TV.

In addition to crossing the $1 billion revenue threshold Pluto TV experienced tremendous growth in users and watch time.

Total global viewing hours increased over 50% to $4 8 billion.

While viewing hours per domestic I may you grew a healthy 12%.

In a moment I'm going to explain how our performance in 2021, guys our expectations for future streaming growth.

But before doing so let me explain changes, we're making to our financial disclosures.

Which will improve the visibility of this direct to consumer growth.

While highlighting the profitability of our traditional business.

Today, we published recast it trending schedules on our website presenting historical results through the lens of our three new segments as shown here.

First a highly profitable and resilient T V media business.

Which include our global broadcast and cable network businesses and their associated studios that were reported separately in our legacy TV Entertainment and cable network segments.

It also includes Paramount television studios, which was previously part of the filmed entertainment segment.

Second.

Filmed entertainment, which is comprised of the Paramount Pictures and Nickelodeon Studios.

And finally.

A high growth direct to consumer business, which includes the global operations of our D to C streaming services, consisting of Paramount plus Pluto, TV, Showtime OTT, BT plus and noggin.

All in one segment.

Taking a closer look at our segments under the new reporting structure, you'll notice the profitability of our T V Media segment, which generated nearly 23 billion in revenue and close to 6 billion and adjusted OIBDA last year.

T V media OIBDA was up 1% year over year and delivered a 26% OIBDA margin.

In our D to C segment revenue grew an impressive 83%.

And as you know we continue to invest behind this growth to capture a highly strategic market opportunity.

And as a result of this investment.

D to C operated at a loss of approximately $1 billion in 2021.

In addition to changes in our segment reporting we're also evolving our revenue disclosures.

Our new reporting segments feature for revenue types.

Advertising.

Affiliate and subscription.

Theatrical and licensing and other.

Our streaming revenues are now captured as advertising or affiliate and subscription revenue in either the D to C segment or the T V media segment, if not directly related to our D to C services.

And to offer a closer look at direct to consumer we will also be publishing revenue and subscribers or monthly active users for Paramount plus and Pluto TV respectively.

As shown on this chart by year end 2021 Paramount plus had $32 8 million global streaming subscribers.

As Bob mentioned, Paramount plus has been the key driver of subscriber growth representing over 80% of the $26 2 million global streaming additions we gained last year.

Paramount plus generated 1.3 billion in revenue in 2021 up 115% year over year.

Domestic paid ARP, who approached $9 in Q4, reflecting a mix of essential premium and promotional subscribers and.

In 2022 we expect both domestic and international ARPA to move higher.

Domestic ARP, who will benefit from improved AD monetization and the conversion of trial of promotional subs to full paying for us.

In international our pool will improve too as we launch in large international markets with significantly higher average <unk> than our current international sub base.

And on Pluto TV you now know we added over 21 million global M. A use in 2021, delivering almost 90% topline growth that's $1 1 billion in revenue.

In the U S pluto's efficient business model and impressive <unk> growth demonstrate increasingly strong margin potential.

In fact, Pluto Tv's global ARPA increased 17% year over year to $1 64 with.

With domestic RP was significantly higher at $2 54.

Up 44% year over year.

We're also simplifying the way we record direct to consumer content expense.

To more clearly present.

Actual cost to the company of our streaming investments.

We are no longer recording intercompany licensing between segments. Instead, we're allocating content costs to each segment based on the relative value of the distribution windows exploited by each reporting segment.

What does this change mean for D to C investment.

While under our new reporting structure DTC content expense would have been about $1 billion in 2020, and $2 2 billion in 2021.

We think this combination of changes makes it easier to understand and value the future Paramount.

It's a future we are very excited about because it leverages the assets from our traditional media enterprise to build a large scale global direct to consumer business with attractive long term margins.

As Bob laid out streaming unlocks a tremendous incremental market opportunity for paramount compared to pay TV.

In fact relative to our existing pay TV footprint, which reaches 300 million households are streaming strategy, which is more than double that amount to well over 600 million broadband homes, excluding China and India.

And this number will continue to grow, especially when adding mobile broadband users. A previously inaccessible segment will soon be targeting with a mobile only plan for Paramount plus in certain geographies.

Our broad approach to streaming positions us to capture an even greater portion of this growing addressable market with better long term economics.

Let me ask three examples from our playbook to explain how our approach yields financial benefits and create long term value.

First.

Within Paramount plus and across our ecosystem.

We benefit from a combination of subscription.

And advertising revenue.

This gives us multiple ways to grow beyond just subs in place.

Our dual revenue stream model allows us to grow our food through enhanced engagement and monetization.

And we can reach an even larger audience by appealing to the hundreds of millions of consumers, who prefer to pay a low or no subscription fee for their content.

Advertising is powered the media business model for decades powered broadcast television it's been essential to cable television.

Today.

As we look ahead to the future it adds incredible value to our streaming playbook.

As part of a hybrid subscription AD supported model like Paramount plus.

And as a pure AD supported service with Pluto TV.

Second when it comes to distribution.

Also running with a differentiated playbook.

Combining the top notch consumer experience and massive addressable market of streaming with the attractive economics of the traditional cable model.

At a time, where our partners are focused on using streaming services to further leverage their broadband presence and expand customer offerings.

Take our hard bundled deal with sky or the deal we announced today with canal plus.

Were Paramount plus is instantly distributed to millions of sky cinema or cannot lose customers.

While <unk> is lower than in our direct to consumer channel.

It's higher than linear TV subscriber scale very quickly, we incurred no customer acquisition billing or support costs.

And we eliminate the risk of churn when series reach end of season.

This play is enabled by our long standing relationships with global Mvpds, and a differentiated value proposition of Paramount plus.

And of course, these hard bundled relationships, let us maximize reach by complementing our higher ARP, who direct channels and customers, we acquire through streaming platforms like Amazon Roku and Apple.

Third.

We have a unique opportunity to leverage our content investments across our broad platform.

It's the perfect illustration of how our so called legacy businesses.

Enhanced streaming economics.

And it's not just a hunch.

We measure return on investment on a show by show basis.

Unlike a pure play streamer, our ROI equation benefits from broad platforms like box office revenue Pluto TV third party licensing download to own and consumer products among others.

Coupled with the lifetime value of each Paramount plus customer directly attributed to the title. This diversified model consistently demonstrates compelling ROI across many popular Paramount plus releases.

Which brings us back to our differentiated streaming playbook.

These monetization opportunities improve the return on streaming content.

And are not available to a pure play streamer.

In our model. These traditional businesses are powerful sources of economic and promotional value.

While high aimed high impact Paramount plus exclusives like mayor of Kingstown, and 18 83 are important to our growth.

They are only part of our success equation.

Paramount plus is also powered by a deep portfolio of both shared and library content.

With strong momentum in our direct to consumer business and a differentiated streaming playbook. We're confident that the opportunity ahead is as Bob said matched only by the scale of our ambition to season.

Just one year ago, we set a goal to reach 65 to 75 million global streaming subscribers by year end 'twenty 'twenty four.

We now expect to surpass that goal by the end of 2022 two years ahead of schedule.

Today, we are raising that goal to over 100 million global DTC subscribers by year end 2024.

This excludes subscribers, we expect to serve with Sky Showtime.

It will be reported separately by the JV.

At Pluto TV engagement at Arf, who have accelerated meaningfully in the past year.

Increasing our ability to monetize the 100 to 120 million global M. A use we expect to reach by 2024.

And this combination higher subscribers and <unk> as well as accelerated monetization improvements at Pluto TV means our goal for 2024 D to C revenue.

Has increased substantially.

Last year, our goal for global streaming revenue was to exceed 7 billion in 2024.

As you can see on the right side of this chart that included 6 billion of revenue now captured in our D to C segment with the remainder being digital video advertising now captured in our T V Media segment.

As a result of our momentum and incremental investments we are raising our 2024 direct to consumer revenue goal to over $9 billion.

That's 3 billion higher than the 6 billion, which was embedded in our 'twenty 'twenty four revenue goal just one year ago.

The incremental D to C. Revenue consists of both more aggressive subscriber assumptions and ARPA improvement driven by the combination of subscription price increases and growth in advertising monetization.

Now of course, our growth depends on delivering killer content.

Last year, we told you we expected streaming content expense to exceed $5 billion in 2024.

This included $4 billion of expense associated with our direct to consumer services.

We now expect D to C content expense to grow from $2 2 billion last year to over 6 billion in 2024.

Given these investments we forecast do you just see OIBDA losses will be greatest in 2023, but will improve in 2024, when our global D to C businesses will start to see the benefits of our full content slate, including Paramount pay one movies.

I, then will be launched in significantly more markets advertising and subscription monetization will be higher.

And the layering of content amortization expense will begin to stabilize.

And longer term our model suggests that the DTC segment will approach margins similar to our current television media business.

I also want to provide some color on near term expectations for each of our segments in 2022.

At T V media, we expect adjusted OIBDA to be similar to 2021 when adjusting for the benefit of Super Bowl 55 in Q1 of last year.

Similarly, we expect adjusted OIBDA at filmed entertainment to remain stable year over year absent changes to our current philson.

And indeed to see we anticipate a another year of very healthy subscriber growth led by Paramount plus and continued expansion of Pluto TV.

All of which will translate to DTC revenue growth in excess of 60% for the full year.

In fact, we expect D to C revenue growth in Q1 to accelerate beyond 2021 full year DTC revenue growth rate.

As we grow direct to consumer will see additional investments in content and international launches.

As such we anticipate an increase in OIBDA losses of approximately 500 million for the D to C segment in 2022.

On a total company basis consolidated OIBDA will show sequential increases in each quarter of 2022, including Q1.

Regarding the year over year trends, the first half of 2021 incorporated several non comparable items, which benefited OIBDA in the period, including the Super Bowl the impact of Covid on linear production and film releases.

And the launch of Paramount, plus which did not occur until March four.

Therefore, the first half of this year will show a material year over year decline in OIBDA, which will then flip to a significant year over year growth in the back half of the year rich.

Resulting in the full year trends I just described.

We've covered a lot of ground today and I know everyone is looking forward to the Q&A session. So on behalf of my colleagues, let me recap four key takeaways.

First in just one year Paramount plus has outperformed all expectations.

We have serious momentum and credibility to establish ourselves as a scaled streaming player.

Second.

We are enhancing transparency.

We want you to see and understand the evolution of both our D to C and traditional businesses.

Third.

We are taking our ambitions to new heights.

We're investing in growth.

With significantly higher goals for streaming subscribers and streaming revenue.

More.

And most importantly.

We are executing a differentiated streaming playbook that leverages, our traditional businesses to yield faster growth and attractive long term D to C margins.

With that let me introduce Anthony Diclemente Executive Vice President Investor Relations to lead us through Q&A.

Thanks, Kevin and thanks to all of you for joining us here for todays discussion, we have Bob <unk>, our president and CEO Naveen Chopra, our CFO and Tom Ryan President and CEO of streaming I also want to note that slides from today's presentation will be available on our website. After we conclude we're going to spend that.

30 minutes answering your questions. Our analysts are joining us by zoom in order to help us to get to as many of your questions as possible I'd like to ask that you. Please limit yourself to one question.

With that let's open the lines.

Our first question will be coming from Mike Morris at Guggenheim. Mike Go ahead with your question.

Thank you Anthony and thank you for all of the information you guys just shared.

I guess with my one question I'd like to ask you about the path to the subscriber guidance that you have out there the $100 million by 2024.

Can you share anymore details with us about what that path looks like over the next couple of years, whether there are different milestones that would accelerate or or.

Cause choppiness in that path and can you give us any more details about how you see the geographic mix of that subscriber base evolving. Thanks.

Sure Hi, Mike its Devine I'll take.

Take that question.

In terms of how we see our DTC business grow into a 100 million, we do think theres going to be some.

Relatively steady growth over the next few years, if I were to break that down a little bit more I'd say a couple of things number one in 2022 as I mentioned on the call.

We do expect that we will exceed our prior guidance for 2024 sets and in saying that we mean exceed the high end of that guidance. So that gives you some sense of what we expect to see in 2022, and we expect a.

Healthy rate of growth to continue in 2023 and 2024.

In terms of the geographic composition of subs.

We obviously have global ambitions.

Which means that we expect both domestic subs and international subs to be important contributors to achieving that 100 million sub goal.

You think about our D to C subscriber base today, it does skew a domestic.

But as we progress and as we launch Paramount plus in more markets.

Portion of overall subs that is made up from international will continue to grow if I look forward to 2024, I would expect that domestic will still be the larger portion of our base.

But you will see quarters over the next a year, where the SKU of new subscriber additions, maybe either domestic or more international Q4. As an example, where we saw tremendous growth was heavily driven out of the United States, but there will be quarters next year, where we launch in new markets, where we launched new partners were.

More of that growth will skew international but in the long run both domestic and international are going to be important because at the end of the day, we're building a global D to C business.

Mike the only thing I want to add is that 100 million number does not does not include subscribers. We expect from Sky Showtime, that's an unconsolidated joint venture and we we obviously expect that to be in the many millions of subs.

Yes, the Q4 sub growth was skewed domestic to be clear.

Thanks, Mike.

We'll take our next question from Bryan Kraft from Deutsche Bank, Brian Go ahead with your question.

Thanks Anthony.

Bob.

Jimmy can you just size the free cash flow investment in streaming investments.

Over the next couple of years or maybe talk about the delta between EBITDA and free cash flow and when that might peak just.

Just so we can help to model.

Help us model that.

And.

Bob you doing Chris Mccarthy talked recently and Chris talk today about emphasizing the company's shift shift to leveraging franchises in a bigger way can you talk about how that's going to really be different.

Going forward than it's been historically and what that what that means for the business and what you've seen so far and what gives you the conviction that that's going to really carry the subscriber growth that you're forecasting over the next few years. Thanks.

Hey, Brian So the answer on free cash flow I think is relatively straightforward.

If you think about 'twenty two as an example, we've given you some sense of what to expect on earnings I think the year over year change on free cash flow will actually be more moderate than the change in earnings.

And the reason for that is that we are seeing the benefit of significant working capital improvements that we've been able to make over the course of the last year and we expect to continue to do that so while there'll be incremental investment.

From an earnings perspective cash flow impacts would be a little more moderate.

Yeah with respect to your question on franchises, we are absolutely increasing our focus is on franchises with respect to our content investments I think if you look at the company historically, probably most of that franchise work was done at Nickelodeon and you saw us look to move quickly and benefit from that.

The launch of Paramount plus with the Spongebob movie.

The first Spongebob Spinoffs series camp Coral since that time, what you see as abroad, including today, what you see is a broader commitment to franchises, including strategies, which span.

The actual to series you heard that today with respect to Sonic you see that with respect to Yellowstone spawning.

183.

We have a whole range of these in place. So it's really a philosophical change that connects with a one company mentality that crosses platforms and feed streaming that is the step function change and are embracing franchises.

Great. Thank you, Brian we'll take our next question from Brett Feldman at Goldman Sachs Go ahead with your question.

Great can you hear me okay.

Yeah, we can hear you fine.

Great.

So when you had outlined your initial expectation that you'd be growing your content spending that you are allocating into the streaming business at a time from $1 billion 5 billion you'd indicated that that was not necessarily all going to be incremental to the company.

Obviously had a tremendous amount of success with streaming products. Since then and you've kind of signaled a desire to invest even more so the question would be that additional $2 billion that you outlined by 2024 to what extent is that purely incremental and to what extent is it represent medium schlichter reallocation away from your.

Traditional TV media business and just any more color you can give us about what's driving that that additional investment other than just more content. For example are you going to be leaning a bit more into local language content outside the U S.

Yeah, Hey, Brett.

Let me try to give you some additional color on that and I think the essence of the question you're asking is really what happens to total company content spend in.

In combination with the incremental investment, we're obviously, making in DTC.

And the answer to that is the following while we're investing aggressively in the DTC growth.

We are also carefully managing spend in the traditional side of the business and that applies to both content investments as well as <unk>.

Looking at other opportunities to unlock operational efficiency.

Actually seen us do that quite extensively over the last couple of years, whether that's doing things like combining networks or looking for ways to find.

Other efficiencies in our operating expense.

We think we've been quite.

Innovative in being able to do that and you'll see us continue to pull those levers going forward, you'll also see us lean even more aggressively into leveraging global production, which has significant benefits in terms of.

Helping us create cost excuse me create content much more efficiently.

Take as an example, some of the things that Chris Mccarthy mentioned that he's dealing with shows like the challenge by leveraging global production capabilities.

So that formula is going to be a critical part of what allows us to.

Run the business with total company content spend that is growing at a much much slower rate.

Then what you'll see on the DTC side and it's also a critical part of the equation to returning the company to earnings growth in 2024 and beyond.

Local language content investment yeah.

So with respect to.

Local content global content.

We are strong believers in the importance of local content I'd point out. This is not a new concept for us we've been operating in geographies around the world for most of our history as Bob pointed out.

And we see tremendous opportunities to leverage a lot of the local content that already exists.

As well as combining that with global content from the U S that travels well we've had many examples of that whether it's a yellowstone or Dexter we also utilized global formats.

<unk> heard about that in a Christmas presentation as well.

And we're also now increasingly taking content that is produced in.

In international markets, and bringing it back to the United States. So there's many opportunities to take advantage of our global footprint and that is all part of how we have thought about our content expense over time, so when we talk about the $6 billion.

A b to C content investment.

In 2024 that assumes a mix of both global content and locally produced content.

Great. Thanks, so much Brett.

We'll take our next question from Ben Swinburne at Morgan Stanley Bank go ahead.

Thank you good afternoon.

Bob since you came to Viacom you have taken a new approach to distribution partnerships.

Obviously critical to driving direct to consumer I'm wondering if you could talk about your strategy based on what we heard this afternoon to leverage distribution partnerships internationally.

And in the U S and maybe you can in your answer to address some of the concerns investors may have about your ability to maintain.

Your pricing power and carriage position in the U S. Given how profitable that business is.

Thank you.

Sure Ben So look if you look at the history of the company you see that we've long been a believer in ubiquitous distribution and executed in that way and so as we look at the D to C. Space. We believe ubiquitous distribution is a powerful lever to pull to drive access to the largest potential Tam.

Now in doing so we believe you need a strategy that's really multifaceted and this is where you see us pursuing hard bundles channel stores and pure D to C and each of the strategies have different characteristics, but in totality. They are very powerful so on the hard bundle side.

Notably exemplified by Sky and buy the canal flu steel.

We announced today there is an opportunity to get very quick sub base had a very low some subscriber acquisition cost with minimal churn going forward.

So we like that a lot as we begin to build scale you look at the channel store side that provides access to a flow of traffic you're paying a little bit higher cost of sales, but again, a nice chunk of users and then you've got D to C, which gives you the highest ARPA and gives you access to the full marketplace, we think that.

That put together creates the highest growth sub base with the most stability over time and again allows us to work with partners of different shapes and sizes and building our streaming business, you'll see us doing that by the way in the United States too.

Whether that's working with an M. B P D, where we've broadened our relationship to include not just linear channels not just advanced AD sales, but also streaming apps, including free and pay you see us doing that with now with mobile carriers like T mobile, where we launched Paramount plus.

Late in 'twenty, one and we're looking forward to marketing kicking in at the end of the first quarter that we really begin to drive that sources subscribers and then later billing integration in the middle of the second quarter or so.

We think these powerful these partnerships are very powerful and we're committed to leveraging them as we pursue this ubiquitous distribution and penetrate the largest addressable market. So hope that helps.

When I address mvpds in the U S.

I discussed them that look like.

In the PD is if you look at that just broadly speaking since we put this company together.

We've consistently gotten deals done most recently with Comcast again, those deals are now very contemporary and that they combine linear feeds mirth AD sales and apps.

Strong partnership with clearly a cornerstone content provider and we look forward to doing.

Growing business in that space, particularly as they go after broadband and leveraging their broadband accounts into video again, we're a natural partner of theirs.

Great. Thanks, so much Ben will take our next question from rich Greenfield that likes it rich.

Thanks, Anthony Thanks for taking the questions I've actually got a few and I know you said, one but just real quick.

I guess for Bob to start off when you say your platform is differentiated what do you point to most like what do you think differentiates Paramount plus most from the other services that are out there too I think <unk> I think you said D to C margins should approach linear margins I think that's a question that investors sort of struggled to understand just given sort of everybody pay.

For every channel versus just paying for what they want so like how does that math sort of worked out long term and then just a quick housekeeping question. When you think about free cash flow. This year, obviously your free cash flow Didnt cover your dividend and you actually sort of net debt rise. When you think about 'twenty, two and 'twenty three how should we be thinking about those moving pieces.

Relative to the increased investment you just mentioned.

Yeah sure originally me kick it off so we absolutely have a differentiated strategy and streaming that differentiation occurs on a couple dimensions, which I outlined it starts with content.

As I said, we take the plus in Paramount plus very seriously we have the broadest selection account of content out there including.

Full genre mix on the entertainment side news and of course sports NFL European football golf, NCWA et cetera. So we think that's a real differentiator and we've seen all of those lanes worked together to drive our growth, including in the fourth quarter. We're very pleased with the results. In addition to that we believe the <unk>.

Combination of free and pay Pluto riding alongside Paramount plus is powerful and that were differentiated in that regard remember we have the number one fast product in the United States and based on the statistics Ive seen our lead in the United States increased in the fourth quarter, even though we are already the number one player third point <unk>.

Is how we're using our broader range of platforms to drive I think we're doing that better than anyone else look at what we did with Yellowstone into AT&T three look at the integration with a halo in the NFL playoffs were really leveraging these platforms and lastly, the global side of this thing we've been operating.

On the ground internationally for decades.

I believe with respect to the.

The distribution strategy, you have including hard bundles, we are an innovator.

Highly beneficial strategy, you'll see the benefit in 'twenty, two and by the way Youre going to see other people following us because we're already seeing that begin to happen, but just like we benefited by being the market leader in fast and being there earlier, we're here early and you've got a first mover advantage. So we got a lot of differentiation in place, it's working really well and it's going to pay real dividends.

Going forward I mean, yes, so rich the answer to your question first on margins is really an extension of what Bob described which is that we are executing a fundamentally different playbook. When it comes to building our D to C business and in fact, a lot of the things that we're doing actually replicate some of the.

The benefits that you see in the traditional universe.

Specifically with regard to some of the things that you mentioned so whether it is the ability to leverage content across multiple platforms, whether it's the ability to use bundles and other partnerships to acquire subs efficiently and ensure that they don't churn the way that they might in a pure play D to C.

Business, whether it's the ability to use our built in promotional platform or our global production capabilities. We're talking about a very different version of streaming economics than what you would see in a pure play streaming business and that's why we think about the long term margin potential very differently with.

With respect to your question on free cash flow I point out a couple of things number one as I said, we do think the free cash flow impact of the investments that we're making is more moderate than what you'll see on the P&L. Moreover, we have a very strong balance sheet as we.

Move into an <unk>.

Greater investment mode in D. C. Over the next few years remember we finished the year with $6 8 billion excuse me $6 3 billion of cash on the balance sheet.

More than enough firepower to make the investments that we envision in streaming.

We have no near term maturities.

And we continue to maintain a significant amount of revolver capacity, so we like our financial position.

We're very well equipped to invest to capture the growth on D C and to continue to fulfill all of our financial priorities, which as I've articulated before include investing in organic growth through streaming. It includes funding our dividend and it includes deleveraging our balance sheet and I think you'll actually see us do.

And all three of those things in 2022.

Great. Thanks for the multiple questions Rich we will take our next question from John Hodulik of UBS John .

Yeah.

Great. Thanks, guys.

Two questions if I may 1st on the <unk>.

Licensing side, you guys had another strong quarter of content licensing, but at the same time talked about pulling back on the pay one window in a couple of years could you just talk about maybe quantify the impact of that change and just maybe give us some color on how you expect that line to trend over the next couple of years. That's number one and then just a quick follow up just anything you can tell us about your.

Appetite for international Sports rights.

I think Bob you guys laid out.

So you can do right you have in Mexico, and Central America with football and I think there's some new stores out essentially bidding on the IPL in India, but just any thought.

It's around that or or or new rates you guys could acquire in the future Yeah sure. John So look on the content licensing side as you know we've made a strategic pivot at Viacom CBS now Paramount.

Two pointing our content engines at our streaming platform, notably Paramount plus we've already seen early benefit from that in terms of the fourth quarter and we believe that is fundamentally the right thing to do as we look to create asset value and theres clear examples of asset value creation in the streaming space, where you're successful and again we in.

Tend to be successful so we're doing that in parallel to that we are continuing to fulfil deals we've put in place pre Paramount plus so those are like season N plus one of our particular show maybe Jack Ryan as an example, we have contracts in place and we're going to continue to do that we also continue to do some selective nonexclusive.

<unk>, which we found to be in effect in franchise development tool as we continue to build new versions of product again for Paramount plus so you should expect us to do that over over time again, we think it's strategically right.

And we think we also have some incremental financial benefit from that in terms of your question on International Sports rights look it's early days, but we've seen real benefit of sports as part of Paramount plus in the United States.

NFL as you saw on one of the charts was the number one source of subscriber additions for the product in 2021, and we have found that we can cross consumers, bringing me on sports and get them to consume entertainment product sports fans. As an example in the fourth quarter were also big consumers of shows like field team.

And mayor of Kingstown, and 18, 83, and that's key to our overall plan and economics and ROI. So we're looking selectively at adding sports product internationally. We've done some of that in Latin America. We've done some of that in Australia. The IPL thing in India is really Viacom 18, which is our joint venture over there so.

Again, we think sports is additive and certainly a differentiator for US you need to be disciplined in terms of how much you pay and you need to be effective in terms of extracting the value including through co usage of other product, but sports is definitely part of our streaming playbook and by the way we have a lot of benefit from our.

CBS sports heritage as we pursue that opportunity.

Great. Thanks, so much John and we'll take our next question from Jason Bazinet Citi. Jason Go ahead with your question.

Thanks, so much maybe a little bit of a complicated question, but.

Under the old accounting standards for film or television you would amortize it based on.

Matching of revenues as a percent of your ultimate revenues.

So the margins are sort of the consistent all the way through in the streaming world I think the amortization is a function of the strange and it's sort of ignores the fact that the consumer gets more utility out of new content versus old. So how do you how how can anyone have confidence that the streaming business is going to be is going to be a good of a business as you know.

New television media segment as an example.

Hey, Jason I'll I'll take a shot at that.

First just in terms of understanding the methodology on an allocation.

First very big picture as I said in the prepared remarks, our general approach to cost allocation is based on the relative value of windows that.

Any given service has rights to exploit.

That addresses sort of how we allocate costs between for instance, theatrical and streaming if a movie.

It starts in the theater and then ultimately ends up on Paramount plus in terms of.

The allocation within streaming.

We actually don't.

Entirely allocate based on the methodology you described there is a.

A recognition of the fact that content tends to have significantly.

Significantly more value in its early days on a streaming service. So a lot of the Amor is accelerated and then spread over time.

It is one of the reasons why as we continue to build our library and.

Assemble more and more content on Paramount plus we believe there is an opportunity for leverage in the model.

And in my prepared remarks that one of the things that takes us through that inflection point of peak losses in DTC in 'twenty. Three is the fact that we're then at a point in time, where we're actually starting to see things roll off from an amortization perspective as opposed to in the first few years everything is coming in nothing's coming out so.

You really start to see the operating leverage are improving the business at that point in time I ask I just want to add one other point because something you said is not reflective of what we've seen is Jamie you said that only new content matters in terms of streaming consumption. That's actually categorically not true. It is true that new originals are key to subscriber acquisition, but.

What is tremendously valuable in streaming is library and specifically series that are deep and number of season. So you look at the ntis as the F. B is the field teams the Spongebob et cetera, those are tremendously valuable for in some cases, bringing people in but for the most part in terms of engagement and engagement is.

What you used to manage churn so with respect to the value of content. It's not all about exclusive originals. He's libraries are highly valuable and when you look at Paramount to what we call. The company now we have very deep very high quality libraries and from the original Paramount studio from CBS from Showtime from the cable.

Networks and those are tremendously valuable for streaming both for Paramount plus and for Pluto TV. So don't lose sight of that value because it is very material and it's key to our long term streaming economics as well.

Thanks, a lot Jason we will take our last question from Steve Kay Hall at Wells Fargo. Steve Go ahead.

Hi, Thanks, just one kind of along domestic question. So I was wondering if you could talk about where you think you are in the domestic journey in terms of subs for Paramount plus then and where that can go and similarly, you talked about the $9 <unk> as we think about both.

Prescription and advertising revenue, how do you think about the upside to domestic <unk> and just while we're on domestic Paramount plus.

I think if you could go back in time, you might look at a slightly different arrangements for some of the early season.

Yellowstone withdrawn our competitor service do you have any levers you can pull in the next couple of years to consolidate the Yellowstone library entirely on to Paramount plus thank you.

Yes, So let me start there so I would say we are very early in the Paramount plus subscriber journey remember this product didn't exist a year ago today.

So we've seen it build through calendar 2021 after launching in the March time frame.

But really the fourth quarter was the first time, we had anything resembling scale in the scripted side for example.

So there's a ways to go in terms of.

The scale Paramount plus will build in the United States and you saw it today really the incredible content lineup, we have coming across all of these genres. So again I think there's a lot of headroom here on on subscribers all adjust the Yellowstone point, and then flip it to Levine for ARPA with respect to Yellowstone you write that deal was.

Done pre the Viacom CBS merger that's unfortunate.

Rather than just forgo that opportunity we chose to aggressively get into spinoff series like 18 83.

Related theories in terms of the creator and mayor of Kingstown, you saw some more stuff coming that's working very well for us Yellowstone is.

Part of Paramount plus internationally. So that's how we think of that franchise today.

I mean, yeah, let me jump in on the <unk>.

We continue to be very encouraged by what we've seen from an RPM perspective, particularly in the domestic market you saw in the prepared remarks, the $9 paid argue that we are.

Variance in Q4.

We see continued upside in domestic <unk>, both short term and long term.

Short term there are really two key factors, we expect that there'll be a benefit from the continued conversion of.

Promotional and trials is fibers to fully paid paid subs, we continue to see very healthy Ah trial to pay conversion rates. So we actually see that as a compelling opportunity for the service both from an <unk> and an overall revenue perspective.

We also expect to see continued improvements in the monetization of advertising on the essentials tier of Paramount plus.

The essentials here is a significant portion of our subscriber base, both central and premium sort of balanced composition.

But we have seen improvements in the AD RP that generated on the essentials here as engagement continues to grow with the service and we expect that will continue as we add more and more content to Paramount plus and then longer term, we also see ARP who upside.

Coming out of the ability to adjust price as the content selection on the service continues to grow and as use of Paramount plus becomes even more habitual and I think we'll probably get some tailwind in that.

Regard from the category in general, where you're seeing pricing continue to move upward. So there will likely be opportunities for us to adjust price and still maintain our value proposition relative to others. So.

We're very bullish about where were are who can grow and it is as I pointed out Jeff.

Definitely one of the key ingredients to how we grow the business from a little over $3 billion of.

DTC revenue today, two 9 billion plus in 2024, it's not just about adding subscribers, it's about adding subscribers and growing our pool. So we really liked that equation and the growth that it can create.

Great. Thanks, Denise and thank all of you for your time for your questions. Today, It's an important dialogue and it's really an exciting time for the company. We now call. Paramount look this is a time characterized by great momentum and at the time reflective of tremendous go forward opportunity. So again, we appreciate you joining.

US we appreciate your continued support and wish everyone well, we'll talk to you soon.

[music].

Q4 2021 ViacomCBS Inc Earnings Call

Request a DemoDemo

PSKY

Paramount Skydance

Earnings