Paramount Global (PARA) Gains From Maverick's Paramount+ Premiere

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Paramount Global QuoteParamount+ to Aid Subscriber GrowthParamount has been focused on setting a strong pipeline of movies and shows on the streaming platform which is expected to fuel its fan base.Paramount added 4.6 million subscribers to its Paramount Plus streaming service and Pluto TV added 2.4 million monthly active users globally in the third quarter of fiscal 2022. This has bolstered affiliate and subscription revenues by 8% in the discussed quarter.The company now expects to exceed its full year global direct to consumer subscriber growth expectation of 75 million global subscribers.Paramount+ recently added a slew of movies to its streaming library, including horror hit Smile and the Sandra Bullock and Channing Tatum-starring rom-com The Lost City. Paramount+ also announced the revival of the popular FBI drama, Criminal Minds.The company plans to celebrate the 50th anniversary of hip hop music and culture for which Paramount+ will offer 50 of the most iconic episodes of MTV Entertainment's original series Yo! MTV Raps for the first time since it premiered and episodes from the home-makeover series, Hip Hop My House.Paramount also entered a new multi-year distribution agreement with Virgin Media, under which, Paramount+ will debut on Virgin TV in 2023 and Pluto TV will be more widely distributed on Virgin TV 360 and stream services.Besides expanding the content library, Paramount+ has also been expanding its footprints globally. It has plans to introduce Paramount+ in Germany, Austria, Switzerland and in France with Canal+ this year.Decline in Ad Revenues to Hurt the Top LineParamount Global has been facing a slump in its ad-revenues, which declined 2% in third-quarter fiscal 2022 and is expected to decline by a larger percentage in the fiscal fourth quarter as well, as per CEO Robert Bakish.Robert Bakish has also revised the company's previous forecast downward, below the fiscal third quarter, rather than in-line with prior results.The toppling of ad revenues could be attributed to the economic downturn, which started with the coronavirus pandemic and was further led by the Russia-Ukraine War. These have resulted in high inflation, rising interest rates, high capital costs, a soaring U.S. dollar and an anticipated recession in the coming year.In such turbulent and uncertain markets, companies are trying to decrease their costs and the first step to take on the heels of it is to compromise on advertising expenses.Besides, stiff competition from streaming leaders like Netflix (NFLX - Free Report) , Walt Disney (DIS - Free Report) and Warner Bros Discovery (WBD - Free Report) is likely to impact subscriber growth for this Zacks Rank 5 (Strong Sell) company in the near term.Both Netflix and Disney are set to launch their ad-tier subscriptions by the end of this year. These low-cost subscription plans are expected to improve their subscriber growth.Netflix added 2.41 million new paid subscribers while Disney reported an increase of 12 million subscriber sequentially.Warner Bros saw streaming subscriptions rise to nearly 95 million combined global customers across HBO, HBO Max and Discovery+ in third-quarter fiscal 2022. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. consumer-discretionary internet-content

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