Combined for $21 trillion in revenue—and $2.1 trillion in profits. Introducing the 2026 Fortune 500, the definitive list of the biggest companies in America.

<p>This company epitomizes Hollywood's fast-shifting corporate landscape. It was formed last August when Skydance, founded by David Ellison, merged with Paramount, owner of CBS and movie IP like the Mission: Impossible franchise. It will morph further this year as it completes the acquisition of rival Warner Bros. Discovery.</p>

Fortune 500

Almost $20 trillion in revenue—and a record-breaking $1.87 trillion in profits. Introducing the 2025 Fortune 500, the definitive list of the biggest companies in America.

Industries included in the sector are entertainment and publishing.

Fortune Sector Leaders: Media

The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

The corporations on our annual list of the world’s largest companies delivered a record $41 trillion in aggregate revenues.

Fortune Global 500

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

Aggregate sales hit $37.8 trillion last year—an increase of 19%, the highest annual growth rate in the list’s history.

This year’s Fortune 500 marks the 68th running of the list.

Total revenue for the world’s biggest companies fell 4.8% to $31.7 trillion this year—the first decline in half a decade.

ViacomCBS was formed in 2019 when CBS and Viacom merged—13 years after breaking apart. Today the mass media conglomerate operates more than 170 networks reaching 700 million subscribers worldwide. As of the first quarter of 2021, the company had some 36 million paid streaming subscribers for its Paramount+ and Showtime offerings.

This year’s Fortune 500 marks the 67th running of the list.

F500-2021-109-ViacomCBS

This year's Fortune Global 500 generated $33.3 trillion in revenues and $2.1 trillion in profits.

G500-2020-457-ViacomCBS

The reunited CBS and Viacom completed their merger in December and had a strong year, with hits like The Late Show With Stephen Colbert helping to drive $28 billion in sales. But in a March SEC filing the company warned that coronavirus-related production delays may have a material impact on its 2020 results.

This year's Fortune 500 marks the 66th running of the list.

F500-2020-111-Viacom-CBS

The reunited CBS and Viacom completed their merger in December and had a strong year, with hits like <em>The Late Show With Stephen Colbert</em> helping to drive $28 billion in sales. But in a March SEC filing the company warned that coronavirus-related production delays may have a material impact on its 2020 results.

This year's Fortune 500 marks the 65th running of the list.

This year's Fortune 500 marks the 64th running of the list.

This year's Fortune 500 marks the 63rd running of the list.

Here are the World's Most Admired Companies for 2016 as ranked in their industries. See who made the list.

World's Most Admired Companies

This year's Fortune 500 marks the 62nd running of the list.

This year's Fortune 500 marks the 61st running of the list. Wal-Mart claims the top spot again. See who made the list.

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

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Paramount Global organizes its vast media portfolio into three main divisions: TV media, direct-to-consumer (streaming), and filmed entertainment, which includes the iconic Paramount Pictures studio. Its television assets span CBS and cable networks like Comedy Central, MTV, Showtime, and BET. The company also operates and licenses its content internationally. In 2024, Skydance Media announced an $8 billion deal to acquire Paramount by first purchasing parent company National Amusements. The two-part transaction is expected to close in 2025, pending regulatory approval.

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Q3 2024

Paramount Skydance (PSKY): Company Profile, Stock Price, News, Rankings

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Paramount Skydance

paramount skydance

Good afternoon. My name is Nadia, and I'll be the conference operator today. At this time, I would like to welcome everyone to Paramount Global's Q3 2024 Earnings Conference Call.

At this time, all lines have been muted to prevent any background noise. After the speakers' remarks, there will be a Q and A session. At this time, I would like to turn the call over to Jamie Morris, Paramount Global's EVP, Investor Relations. You may now begin your conference call.

Good morning, everyone. Thank you for taking the time to join us for our Q3 2024 earnings call. Joining me for today's discussion are Paramount's Co CEOs, Brian Robbins, Chris McCarthy and George Cheeks and our CFO, Navin Chopra. Please note that in addition to our earnings release, we have trending schedules containing supplemental information available on our website. Before we start this morning, I want to remind you that certain statements made on this call are forward looking statements that involve risks and uncertainties.

These risks and uncertainties are discussed in more detail in our filings with the SEC. Some of today's financial remarks will focus on adjusted results. Reconciliations of these non GAAP financial measures can be found in our earnings release or in our trending schedules, which contains supplemental information and in each case can be found in the Investor Relations section of our website. Now, I will turn the call over to Chris.

Thank you, Jamie, and good morning, everyone. I'm Chris McCarthy, and I'm joined here by my fellow Co CEOs, George Cheeks and Brian Robbins. Together, we'll share the results of another very strong quarter, demonstrating the progress we're making against our strategic plan. Then Navin will take us through the financials. Okay.

Let's start with some headlines. We are pleased with our very strong performance this quarter fueled by our hit content and our focus on execution. In D2C, we saw Pluto reach record engagement. And on Paramount Plus, we had a 3,500,000 subscribers reinforcing our position as the number 4 global streaming service. Paramount Plus continued its momentum with revenue growth up 25% year over year.

This quarter marks the 2nd quarter in a row where D2C achieved profitability with adjusted OIBDA improving more than $1,000,000,000 over the past 4 quarters. And we remain on track to reach Paramount Plus domestic profitability in 2025. We also made progress in streamlining our organization as we continue to successfully execute cost reductions that will result in $500,000,000 in annual run rate savings. And at the same time, we have not slowed down on doing what we do best, continue to produce some of the biggest and broadest hit films and television series. In addition, the Skydance transaction achieved a few key milestones, including the conclusion of the go shop period, the expiration of the HSR waiting period, and on November 4, we filed our S-four registration statement with the SEC.

We continue to expect the deal to close in the first half of twenty twenty five, subject to regulatory approvals and other customer conditions. And now I'll pass it to George to update us on distribution and advertising.

Thanks, Chris. I'll start with distribution. In an evolving landscape, we continue to renew long standing agreements with key partners, including a number of distribution renewals this year. Our track record of getting deals done speaks to the power of our entertainment news and sports content and we'll continue to work with our partners to innovate and deliver for audiences. As an example of that, our Paramount plus ad supported tier is now available to charter customers, enhancing the value we're delivering across linear and streaming.

Now it's early days, but we're pleased with the response so far. Now turning to advertising. Q3 benefited from record political spend as well as the return of NFL and college football. Digital ad growth remains strong, showing notable increase in demand year over year, which reflects our valued position from a price, quality and scale standpoint and will continue to drive growth. The scale of our digital advertising platform spanning Paramount Plus, Pluto as well as other digital properties is one of the largest addressable footprints in the domestic marketplace and it represents nearly half of our national domestic advertising revenue when you exclude sports.

Major brands continue to tap into the power of Paramount. Recently we launched the Summit, a new offering that connects our key ad partners with priority Paramount launches across theatrical, linear and streaming. For our 1st Summit partnership, we brought Pepsi together with Gladiator 2. The campaign launched with the NFL on CBS and included a media blitz across all Paramount Global linear, digital and social platforms. Yet another example of how we're leveraging our creative assets and capabilities to deliver unmatched impact for our biggest advertisers.

I also want to touch on our ongoing dispute with Nielsen. We remain engaged with them and we're hopeful for a resolution. So far we're encouraged by our partners' willingness to lean into innovation and adopt alternative measurement solutions. Bottom line, our brand and agency partners are the number one priority and we're proving every day that content, scale and value are what matters most to advertisers. And with that, over to Brian for an update on our strategic plan.

Thanks, George. We are pleased with the progress we have made in advancing our business by transforming D2C and streamlining our organization to reduce costs. Starting with D2C, the segment was profitable again in the quarter. Sports, including the return of the NFL and UEFA, originals like Mayor of Kingstown and Tulsa King, as well as post theatrical releases such as A Quiet Place Day 1 and If, all drove acquisition in the quarter. For Pluto, we're continuing to see a strong performance.

Year to date, Pluto delivered its highest consumption ever, up 5% to 5,600,000,000 viewing hours. Growth is being driven by increased use of video on demand with more available content, enhanced discoverability and a better user experience. And as we said before, we are evaluating potential partnerships in streaming through a lens of creating value for the business and our shareholders over the long term. And given the complexity, we are being deliberate and thoughtful in our approach and assessment. Moving to streamlining our organization, we have made progress on realizing $500,000,000 in non content cost savings, which will reduce our U.

S.-based workforce by 15%. To date, we have executed 90% of these reductions and expect to have remaining completed by the end of the year. Our objective has been to unlock operational efficiencies and right size the cost base, while continuing to invest in the growth levers that are the key to the future, including content, streaming and advertising. In addition, we remain diligent as we optimize our asset mix. The sale of our equity interest in Viacom 18 is a great example, which will result in an attractive financial return on our investment.

We expect the sale to close in Q4. Now let's move to the core of what we do best, making some of the biggest and broadest hit films and TV series. I will pass to Chris to kick us off.

Thanks, Brian. Let's start with Paramount Plus, where this fall we kicked off one of our most ambitious slate to date, seeing the return of our biggest hit series like Mirror Kingstown and Tulsa King, which returned to great fanfare, each quickly soaring into a top 10 streaming original across all SVOD services. And Tulsa King also broke records as the number one global debut in Paramount plus history. Internationally, where we have South Park exclusively for SVOD, it ranks as a top 5 star driver and the number 2 engagement driver. And we're excited to have the South Park series return to Paramount Plus here in the U.

S. Starting in June of 2025. We're confident this momentum will continue throughout the quarter with the return of Lyoness, which premiered October 27 and is off to a great start, scoring as a top 5 global series premier in Paramount Plus history. Followed by Lammin, a new series from Taylor Sheridan, which will premiere November 17th and stars Billy Bob Thornton, Demi Moore and Jon Hamm. This series has all the makings of a great big hit and promises to do for the oil industry what Yellowstone did for ranching.

Now moving over to our premium tier, this quarter marks the beginning of a new adrenalized showtime slate with cinematic high stake originals and the return of some fan favorites. Starting with the agency, a new global espionage series from executive producer George Clooney starring Michael Fassbender, Richard Gere, Jeffrey Wright and Jody Turner Smith, which will premiere later this month. And that's followed by the return of Showtime's most successful franchise ever, Dexter, with a new origin story titled Dexter Original Sin. And on cable, we also saw some impressive results. The Challenge, the series that created the reality competition genre celebrated its 40th season with the highest share in franchise history, up 60% versus the previous season.

This was followed by the MTV Video Music Awards, which attracted its biggest audience in 4 years on linear. And on social, it broke records as the number one most social entertainment telecast in television history, besting all entertainment and sports. And on The Daily Show, the return of Jon Stewart continues to pay off, having won our 2nd Primetime Emmy in a row and on Monday nights with Jon at the helm, The Daily Show remains the number one late night show across linear and social. And it's working hard for us on Paramount Plus with engagement up 10x. And John's not going anywhere as we just announced he's extended his stay through 2025.

And to continue our momentum, this Sunday, one of the most eagerly anticipated shows of the year will return on the Paramount Network in the U. S. And internationally on Paramount Plus where it's been the number one star driver and the number one engagement driver for the full year to date. And now I'll turn it over to George to walk us through CBS Entertainment, Sports and News.

For CBS, fall means football and the launch of our new prime time schedule. The network is coming off a record setting 2023, 20 24 NFL season as well as the top rated prime time schedule that includes the return of last year's number one show. In the 1st 5 weeks of the season, the NFL on CBS is averaging more than 20,000,000 viewers. That's up 5% from last year. And streaming of the games on Paramount Plus is up over 50% year over year.

CBS Primetime, which just launched its new season is off to a great start. Tracker is once again the most watched series on TV. Matlock is the number one new show and Georgie and Mandy, a spin off of Young Sheldon is the most watched comedy. And our shows are winning across platforms. Matlock's first episode reached more than 22,000,000 viewers in its 1st 30 days.

Tracker's season 2 premiere delivered over 15,000,000 multi platform viewers in just its 1st 7 days. That's up 25% from its time period premiere last year. Now turning to news, the total minutes watched on our CBS News 20 fourseven streaming network continues to grow, up 56% over 2023 and up 78% versus Q3 last year. We expanded and rebranded the platform with more live programming and the increased presence of key CBS News talent. All of this speaks to the collective power of broadcast and streaming, working together to aggregate more unduplicated viewership, while optimizing the value and efficiency of our content investments.

Our programming strategy remains laser focused on entertainment, news and sports that excel on both CBS and Paramount Plus. Over to you, Brian.

On the Paramount Pictures front, at the end of the second quarter, A Quiet Place Day 1 opened to nearly 100,000,000 worldwide and set the franchise record for the biggest opening at the global box office. To date, the film has grossed 261,000,000 worldwide. Transformers 1 also debuted as the first animated Transformers film in nearly 4 decades, grossing 127,000,000 at the global box office to date. And most recently, the October release of Smile 2 from homegrown talent Parker Finn saw a record breaking global premier, out earning its predecessors debut weekend. It also makes Smile 2 Paramount's 4th number one opening this year after Mean Girls, Bob Marley 1 Love and If.

We're confident that the rest of Q4 will build on this momentum, thanks to an impressive roster of upcoming releases, including next up, Ridley Scott's Gladiator 2, one of the most anticipated films of the year with a phenomenal cast, including Paul Muscout and Academy Award winner Denzel Washington. Early tracking and first reactions are generating optimism and excitement for the movie's release and award season prospects. Now rounding out our diverse slate, we're excited to be bringing audiences the journalistic thriller, September 5, which has been on the festival circuit generating awards buzz. Also the 3rd installment of fan favorite, Sonic the Hedgehog, with Jim Carrey and the original cast reprising their roles. And then Better Man, from the director of The Greatest Showman, Michael Gracey and based on the life and music of Robbie Williams.

And looking ahead to 2025, we have a fantastic robust lineup with something for everyone. That includes an 8th Mission Impossible, the reboot of the Naked Gun franchise starring Liam Neeson, new installments of beloved animated franchises like Smurfs and SpongeBob, which is celebrating its 25th anniversary and Running Man from director Edgar Wright and starring Glenn Powell, to name just a few. Taken together, all of our content reinforces that we have so much to be excited about in this period of evolution and transformation for our business and the industry. It is what continues to create value for our partners, investors and the broader media landscape, both now and well into the future. With that, let me turn it over to Naveen for more detail on our Q3 financials.

We'll then look forward to taking your questions.

Thank you, Brian. Good morning, everyone. Q3 demonstrated the progress we've made in transforming Paramount for the future. We delivered adjusted OIBDA of $858,000,000 in the quarter, up 20% year over year, reflecting significant improvement in our D2C business, which continues to deliver healthy top line growth and improved operating leverage. As always, you'll find a comprehensive review of financial results in our press release.

For today's call, I'll focus on a few areas of note, starting with advertising. Total company advertising grew 2%, powered by direct to consumer, which delivered strong growth of 18%, an acceleration versus the 16% growth we saw in Q2. D2C advertising growth was driven by a double digit increase in sold impressions and higher CPMs. And these trends have continued in Q4, where we expect another quarter of double digit B2C advertising growth. In TV Media, advertising revenue declined 2%, an improvement versus last quarter, reflecting the return of football and higher political spend.

Similar to last quarter, international advertising benefited from the recognition of revenue that was underreported by an international sales partner in prior periods. Looking ahead, we expect TV media advertising growth in Q4 to be similar to the reported growth rate in Q3. In Q4 growth, we'll benefit from record political spend, but we'll also have less sports inventory compared to the prior year. Our forecast for Q4 does not assume any additional revenue true ups from 3rd party under reporting. Next, let me turn to affiliate and subscription revenue, which declined 1% in Q3.

Now as a reminder, last year's Q3 included Showtime pay per view events that did not recur this year as we exited Showtime Sports at the end of 2023. This comparison reduced the Q3 growth rate by 2 70 basis points. Absent the impact of Showtime pay per view, affiliate and subscription revenue increased 1% with growth in direct to consumer more than offsetting declines in linear. In the TV Media segment, affiliate revenue declined 6.6% year over year, reflecting ecosystem trends and the Showtime pay per view headwind I just mentioned. D2C subscription revenue grew 6.8% in the quarter, with Paramount Plus subscription revenue up 27% year over year.

Paramount Plus added 3,500,000 subscribers in the quarter, reaching 72,000,000 subscribers overall. Subscriber trends benefited from the expansion of an international hard bundle deal and the return of NFL and college football, new originals and theatrical releases. And in Q4, we expect continued subscriber growth at Paramount Plus, driven by a strong slate of originals and the CBS fall schedule. Unlike Q3, we do not expect to add new hard bundle partnerships in Q4. Global ARPU for Paramount Plus grew 11% in the quarter.

ARPU growth was tempered by the lapping of last year's price increase and a greater than expected shift in the mix of our subscriber base toward our essential tier and hard bundle subscribers. Additionally, the price change we announced in August of 2024 will take some time to be reflected in ARPU due to the grandfathering of existing Essential Tier subscribers. And these dynamics will continue to influence ARPU growth in Q4. The combination of continued healthy revenue growth and expense discipline in Q3 helped deliver our 2nd consecutive quarter of D2C profitability. In Q4, we expect continued top line growth.

However, the timing of content marketing spend will result in a quarterly loss for the D2C segment. That said, we like the trajectory of the business over the last few quarters and believe we're well positioned to reach Paramount Plus domestic profitability in 2025. Next, I'll touch on licensing. Licensing and other revenue declined 9% in the quarter, primarily reflecting a lower volume of licensing in the secondary market and lower home entertainment revenues. Now as I've previously noted, licensing revenue can be fairly uneven from quarter to quarter.

And for the full year 2024, we expect licensing revenue to decline relative to 2023. More than half the year over year decline will come from made for 3rd party productions. And these productions are strategically valuable, but the scale of our business has been impacted by the decision to steer more content to internal platforms. A smaller part of the year over year decline in licensing is related to our 2nd run and library licensing activity, partially reflecting lingering strike impact on the business. Even though we'll benefit from the return of the CBS fall slate in Q4, it will take longer than expected to return to our pre strike level of output.

Turning to the balance sheet. In Q3, we delivered $214,000,000 of free cash flow and reduced leverage to 3.8x. Free cash flow in Q4 will be negative given the timing of content spend and the headwind of approximately $150,000,000 of cash restructuring payments. However, this shouldn't negatively impact leverage as we expect to receive nearly $500,000,000 of proceeds from the Viacom 18 transaction, which is expected to close this quarter. Putting it all together, we remain on track to achieve our key financial goals for 2024.

That includes significant growth in total company OIBDA enabled by the progress in D2C profitability you've seen over the last few quarters and the execution of cost savings initiatives across the company. Similarly, our expectations for full year free cash flow growth remain unchanged. Overall, I think 2024 will demonstrate meaningful progress in the ongoing transition of Paramount, encompassing streaming growth, enhanced cost efficiency and of course, continued investment in our renowned content portfolio. With that, operator, please open the line for questions.

Thank Our first question goes to Ben Swinburne of Morgan Stanley. Ben, please go ahead.

Brian, you talked about being deliberate given the complexity around direct to consumer and partnerships. I'm just wondering if you could talk a little bit more now that you guys have been working on it as to sort of what you're solving for, what are the key variables you're looking for, what would lead the company to kind of pull the trigger on either a partnership or a change in how you're kind of working internationally? I think that's been kind of one of your focus areas in streaming. And then, Navin, it's been, I think, almost a year since you talked about domestic streaming profitability next year. Given the progress we've seen this year and the cost action you've taken, how far away are you from overall D2C profitability?

And any way to kind of update us and dimensionalize sort of the international versus domestic D2C situation as we look at 25 would be helpful? Thank you guys.

Hey Ben, how are you doing? This is Chris. I'll take your first part of your question and then I'll pass to Naveen for the second part of that. First, let me start by saying that we're very proud of the success that we've had with Paramount Plus. This quarter saw revenue growth up 27%.

It's our 2nd quarter of profitability. And for 2025, we're on track for full year domestic profitability. So we feel good about our position and our ability to remain a standalone. Now that being said, you can absolutely count on us to be opportunistic. We're looking at partnerships from a strategic lens to drive more value And you can be sure that in deciding that, we'll take key factors into consideration, but the ultimate value will be, is this going to drive increased value for our business today, our consumers and our investors.

But as it stands today, we have our momentum driven by our strategy, execution and are driven by our hit content. And so we feel good about our position as a standalone and we'll continue to look for opportunities. Haben?

Great. Thanks, Chris. And hey, Ben. With regard to your question on D2C profitability in 2025, as you said, we've made tremendous progress this year. Chris mentioned some of the stats.

I think it's fair to say that progress has been really multidimensional between subscriber growth, improvements in ARPU, strong digital advertising growth and by the way, some real efficiency improvements on the marketing side of the equation. So I think we're well set up for 2025. And as you heard us say, we do continue to expect the business to get to domestic profitability next year. In terms of how that translates to the segment as a whole, I'd note a few things. 1st, domestic, we do expect to be profitable next year.

Pluto is already a profitable business. And so the real variable is, what the P and L for the Paramount Plus International business looks like. And I've generally described that as tracking somewhere in the sort of 12 to 18 months behind the domestic business, just given the relative maturity and the timing of when we launched internationally versus domestic. And I think that's still the right way to think about the business as a whole. And obviously, we'll keep you updated on progress as we continue to move down that path.

The next question goes to Brian Kraft of Deutsche Bank. Brian, please go ahead.

Thanks. Good morning. I guess, the last answer, Navin, was a good segue to my question, which was you've been making various moves in international markets, but I think you've also been reviewing strategy on a market by market basis. So I wanted to ask if at this point there is a clear path forward yet for Paramount Plus in international markets. And if so, if you could talk about what that looks like and how it's differed from the approach up until now.

And then, just a housekeeping question, Navin, and sorry if I missed it, but would you be able to quantify for us the impact of the revenue for prior period international ad sales under that partner under reporting? Thank you.

Hey, Brian, how are you doing? This is Chris. Listen, let me start by saying, we think it is very important to globally monetize our content in the widest possible basis and our success today really proves that out. Now we're taking a market to market approach, when we're looking through the lens of how do we drive the most value. In some cases that will be an owned and operated situation where we control.

In other cases, it will be a hard bundle with a market leader. And in other cases, it may make more sense for us to really go in the licensing model. But you can rest assured, our goal here is to maximize the value for our hit content and look at all opportunities very opportunistically through that lens. And now I'll pass to Naveen for the second half of that.

Yes. Brian, with respect to your question on the size of the underreported revenue in Q3, It is a relatively important factor in the year over year trend for international advertising, similar in magnitude to Q2. Actually, I think a little larger in magnitude in Q3 versus Q2. It's I'd size it in the, call it, plus or minus $50,000,000 range. And importantly, as I said in our prepared remarks, our forecast for next quarter assumes that there is no further true up required due to the under reporting.

Thanks, Brian. Operator, next question please.

The next question goes to Rich Greenfield of LightShed Partners. Rich, please go ahead.

Hi, thanks for taking the question. I've got a couple. First on Nielsen, I think you've dropped I think it's been now over a month, maybe it's been 5 weeks. I think the last time you had an impasse, it was only like 14 or 15 days. I think there's been a lot of speculation in the market that you've saved or that you're in the run rate savings are 100 of 1,000,000 of dollars on the cost side.

But on the other side, I want to understand what's happening in terms of not being able to sell advertising against Nielsen data. Have you seen any material impact in Q4 from not having Nielsen data? And I guess related to that, any top advertisers that have left CBS or your cable networks because you can't sell against Nielsen and I think you're using video amp. And then just maybe a housekeeping question for Chris or George, I guess. On the TV media side of the equation, I think everyone's trying to understand sort of the potential of cost cutting longer term.

Could you just give us a sense in TV Media today, how many employees roughly do you still have in that division after all of the cost cuts that you've done to date? Thanks.

Hey, Rich, it's George. I'll take this. So starting with Nielsen, I want to level set this really is not about affordability. It's about getting the value we need for what we pay. And I think think it's important to consider all of this in the context of the media industry.

I mean, as we all know, linear audiences, especially basic cable linear are declining and shifting to streaming. This of course is going to affect how we look at the appropriate spend here. I mean, for example, we wouldn't want the Nielsen fee for certain networks to be greater than the ad revenue those networks actually generate. Now as to your point on impact, we haven't seen any adverse impact on ad revenue to date and we don't expect a material impact in Q4. But I do want to be clear Rich that we do recognize that Nielsen can be a valuable resource.

It's just that the economics have to make sense for the business. Now as to your second question, right now the number is about 6,000 plus in domestic and about 3,000 plus in domestic. Now you have to remember that that also makes sports production infrastructure and our 27 local stations, which obviously requires a lot of employees as well. But as Chris mentioned before, we're very focused on the organization.

Is there a second question about TV Media?

Oh, I'm sorry. Operator, next question please.

The next question goes to Steven Cahall of Wells Fargo. Steven, please go ahead.

Thank you. So another one on streaming, the S corp indicated that one of the parties might have been interested in a combination or even licensing Paramount Plus. And you've done bundles, we've seen a lot of bundles in the industry. I don't think we've actually seen any app integration or streaming integration deals. So I'm wondering how you think about that.

One of your peers also has a streaming product that has a lot of sports, has a good film library, seems like very strong customer overlap. So how do you think about the opportunities in streaming to go beyond just bundle deals and into something that's a little bit deeper from a consumer perspective? And then, Navin, just an accounting question. What's the method for allocating content costs like sports and series between DTC and TV media when they air on air on both? You're growing revenue and subscribers so strongly at Paramount Plus and you've given the domestic profitability guidance.

So just wondering, if there's a way for us to think about how content expense grows there, since it's shared between the two segments? Thank you.

Hey, Steve, it's Chris. I'll take the first part of that question and then I'll pass to Naveen. As we talked about, we are seeing real momentum at Paramount Plus and across Pluto. We've got great growth, second quarter profitability and on track in 2025. So we feel really good about the position and frankly our ability to remain as a standalone.

Now you talked about bundles and we've got some great partnerships and great bundles in the way of Walmart and with Delta Airlines. Now these are ones that are very specific that add incremental value to us. They bring new consumers and really enhance the value proposition from a total business perspective for us. Now that being said, you can always count on us to be strategically looking through the lens of creating value. Now part of that exercise is really to be opportunistic about both looking at things from a market to market perspective and from a broader partnership perspective.

And in doing that, we ask ourselves, is this the right market or is there something better that we can get and something more value? And you can count on us to continue to do that. But as of today, there's no change. We feel great about where we are and we feel really strong about the position moving forward. Naveen?

Thanks, Chris. Steve, the question regarding how we allocate the cost of content that is shared between our streaming business and our traditional linear businesses, I think there's a couple of important concepts to understand. Number 1, it does differ somewhat based on the type of content, but it's all based on the principle that the allocations of that cost should reflect the relative value of the content windows that each of the platforms has rights to. So what that means is that effectively as more of the viewership moves to streaming, you will see more of the cost being allocated to streaming and moving away from linear. And that's certainly been reflected in the way that we do that allocation for sports, for movies, library and the like.

The next question goes to Michael Morris of Guggenheim. Michael, please go ahead.

Thank you. Good morning and thanks for all the answers. Wanted to ask first about the DTC trends and specifically you said you were pleased with the response so far from charter customers. I'm hoping you can share a little bit more detail on whether the Q3 results reflected the full impact from that charter partnership at both TV and at DTC. And anything you can share about customer activation and any churn from charter subs who are already Paramount plus subs?

Those types of things, I'd love to hear any additional detail you can share. And then secondly, it was a very strong EBITDA quarter, growing 20% year over year. Kind of begs the question whether we should expect any incremental cost in 4Q to maybe offset the strength that you had in the Q3, whether this outperformance kind of flows through to the full year? Thank you, guys.

Yes. Hey, Mike, it's Navin. I'll take both of those. Starting with the question on 3 third quarter sub growth and specifically the impact of Charter. So just zooming out a little bit, the 3,500,000 subs that we added in the quarter, I'd note that there's contribution from both international and domestic.

As I noted in prepared remarks, international did have a new hard bundle that we signed. So that was an important contributor. And on the domestic side, we did see some sub growth coming out of the Charter bundle. So I would note that it's still relatively early in terms of time since the launch of that bundle. And I expect the contribution will continue to grow over time.

That being said, when we look at the 1st few months, if you will, we're actually quite pleased with the results both in terms of the take up from charter subs and the impact on direct sub acquisition. So we continue to like the trends there. Then moving to your second question on 4th quarter and how that is impacted by some of the over performance in the 3rd quarter. Let me give you sort of a big picture answer on that too. If you think about the Q3, the over performance was really driven by the D2C segment, which came in better than we expected.

As I mentioned earlier, that's multidimensional. But in particular, we saw some real strength in marketing efficiency that we were able to realize in the quarter. I would say that the restructuring work had a relatively modest impact in Q3, just given the timing of when those actions were taken, more of that benefit is going to be realized in Q4. So then if you think about Q4 specifically, there are some moving pieces that are probably worth calling out. First, some of the tailwinds.

We will see more of that restructuring benefit that I mentioned. There will also be, as you would anticipate, some real strength in political advertising that will benefit Q4. And Q4 tends to be, relative to the 1st 3 quarters of the year, the strongest quarter for advertising generally. And so I think that will benefit us relative to Q3. There

couple of headwinds to keep in mind. We will have higher content expenses in Q4 than we did in Q3, just given the timing of sports and some of the streaming originals. And as I mentioned, we do not expect to have any incremental true ups for past period under reporting on those 3rd party advertising partnerships. And then there is some shift of marketing expense from Q3 into Q4. But when you put all of that together, I think the key takeaways for you should be that number 1, the vast majority of the over performance that we saw in Q3, I do expect to flow through to the full year.

And number 2, I think we're really well set up for 2025, particularly given the progress in B2C, and the significant improvements that we've made in profitability for that part of the business.

Thanks, Mike. Operator, we'll take one last question, please.

Thank you. The last question goes to Michael Ng of Goldman Sachs. Michael, please go ahead.

Hey, good morning. Thank you for squeezing me in. I wanted to just follow-up on the last question around DTC efficiencies. Navin, you talked about the marketing efficiencies. I was wondering if you could just expand on that a little bit in DTC because obviously DTC OpEx was an area of positive surprise.

And then relatedly, was wondering if any of the programming charges taken earlier in the year had any potential benefit to cost amortization for DTC in the quarter as well? Thank you.

Yes, sure. Hi, Mike. I'll take both of those. The DTC improvement that we saw, as I mentioned, did benefit from marketing efficiency, but there's kind of a bigger story behind that, which relates to the composition of our subscriber base. We've talked about for some time now the importance of having a diverse subscriber base that spans multiple channels, the direct channel, partner based distribution on platforms like Amazon, Roku, Apple, hard bundles both domestically and internationally, commercial bundles like what we have with Walmart Plus.

And when you have that sort of go to market approach, there are some real benefits with respect to acquisition costs and churn. And I think we're starting to see those fall into the P and L of the business, which is why I called out the marketing efficiencies that is enabled by the fact that we have these channels where we're able to acquire and keep subscribers very, very efficiently. And that's really flowing through to the bottom line. And then with respect to your second question regarding programming charges, yes, that does obviously have some Amor benefit in future periods. But I think we're really focused on driving the top line growth, continued sub growth, ARPU growth and capturing these improvements in marketing and churn reduction as a way of continuing to drive the business toward profitability.

Thanks, Navin. This is Brian. And on behalf of my fellow co CEOs, we'd like to thank you all for joining the call today. We had another very strong quarter with continued strength in streaming, improving momentum in advertising and meaningful progress in making the business more efficient, all of which sets us up well for the future. All at the same time, while we've been doing what we do best, which is making some of the biggest and broadest hit TV series and blockbuster films.

Thanks to our tremendously talented teams and creative partners. We look forward to updating you all on our progress again soon. Thank you and have a great day.

Thank you. This now concludes today's call. Thank you for joining. You may now disconnect your lines.

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