Future of TV Briefing: Disney, Paramount and Warner Bros. Discovery quantify the TV-streaming divide

As Disney, Paramount Global and Warner Bros. Discovery released their latest quarterly earnings reports, they revealed streaming businesses finally getting into the black and traditional TV businesses getting even bleaker.

This trend has been burgeoning for years, but last week the companies quantified the change to a new extent. Disney and Paramount recorded their first streaming profits, while Paramount and Warner Bros. Discovery wrote down the value of their cable TV businesses.

Streaming profits

• Disney: $47 million profit
• Paramount: $26 million profit

Traditional TV writedowns

• Paramount: $6 billion writedown
• WBD: $9.1 billion writedown

To be clear, streaming remains far away from offsetting the traditional TV declines. For starters, Paramount’s $26 million streaming profit represents less than half a percentage point of the value its traditional TV business shed in the three-month period. Beyond that, Paramount’s deflated traditional TV business — including CBS and its cable TV networks — still turned a $1.0 billion profit for the quarter, which is roughly 39 times the profit of its streaming business.

Nonetheless, streaming is finally starting to pull its weight while traditional TV slims down to size.

This was going to have to happen at some point if the axiom that streaming is the future of TV were to be true. But why now?

Well, mainly because Paramount and WBD each had little choice but to acknowledge the actual value of their traditional TV businesses. Paramount is on the verge of being acquired by Skydance Media. Meanwhile, WBD just lost out on NBA rights, which were a golden goose for its cable TV network TNT.

And to further underscore the importance of sports to TV and streaming businesses’ bottom lines, if it weren’t for ESPN+’s $66 million profit contribution, Disney would have reported a $19 million loss on its streaming business for the most recent quarter. That’s much closer to breaking even than the $505 million loss its streaming business recorded in the second calendar quarter of 2023. But it’s still the difference between profit and loss.

As for the streaming profits, those appear to stem as much from lowered costs as increased revenue. Paramount cut its streaming expenses by $235 million year over year to edge over to the right side of break-even. And in an executive commentary document released with its quarterly earnings report,  Disney cited “strong cost management” — in addition to increased subscription and ad revenue — as a factor in getting Disney+ and Hulu closer to profitability.

Which is to say: This most recent round of TV companies’ quarterly earnings reports may yet mark an inflection point from which the TV-streaming value divide can be quantified. But it also put the latest numbers to how far the companies have to go to close the gap between the two.

What we’ve heard

“AdImpact is a good source for what political spend has happened already and what will happen in the coming months. The forecast is for CTV to be 15%, cable [TV] about the same amount and broadcast [TV] to be about three times that.”

— CTV industry executive

Numbers to know

<50%: Percentage increase year over year in the amount of money advertisers committed to spend against Warner Bros. Discovery’s Max in this year’s upfront market.

$1 billion: How much money Paramount Global said advertisers committed to spend on its streaming inventory in the latest upfront market.

<10%: Percentage increase year over year in the total amount of money advertisers committed to spend with TelevisaUnivision in the latest upfront market.

18.8 million: Number of active accounts for Vizio’s connected TV platform at the end of the second quarter of 2024.

90%: Percentage share of Peacock’s Olympics programmatic ad sales that stemmed from advertisers that had not previously advertised against the sporting event.

$30: By how much the cost of an NFL Sunday Ticket subscription will increase on Aug. 15.

15%: Percentage share of Paramount’s U.S. employees that the company will lay off.

What we’ve covered

TikTok, Snap offer influencer agencies access to data and creators to gain competitive advantage:

• One influencer agency signed a deal with TikTok that includes a dedicated platform rep, customized data pulls and premium ad placements.
• Influencer marketing platforms have signed deals with Snap to improve access to creators’ data on the platform.

Read more about TikTok’s and Snap’s influencer offers here.

Here’s how brands are approaching the Paralympic Games:

• Three advertisers favor the Paralympics for reaching TV viewers while promoting their purpose marketing efforts.
• U.K. broadcaster Channel 4 has created three different tiers of Paralympic sponsorship packages this year.

Read more about the Paralympic Games here.

As athletes embrace influencer work, ‘a new breed of agency’ emerges:

• New types of agencies are combining sports talent management, influencer-style matchmaking and content production into a single organization.
• Klutch Sports Group, Status Creative, Ten Toes and B-Engaged are representative of the trend.

Read more about sports marketing here.

What we’re reading

Former YouTube CEO Susan Wojcicki passes:

Wojcicki, who oversaw YouTube for nine years and had run Google’s ad business prior to that, passed away after a two-year bout with cancer, according to Adweek.

Netflix outsources NFL production:

CBS Sports will produce the NFL games that Netflix will stream on Christmas Day, according to The Wall Street Journal.

Instagram prioritizes view counts:

Views will supersede reach, likes, comments and shares as the main metric that the Meta-owned platform will use to evaluate videos and other content, according to The Verge.

Stand-up comedy is serious business:

Streaming services, including Netflix, Hulu and Amazon Prime Video, have been embroiled in a bidding war for stand-up specials, according to The Hollywood Reporter.

Is Venu an antitrust violation?:

Three members of Congress have asked the U.S. Justice Department to look into whether Disney, Fox and Warner Bros. Discovery are violating antitrust law with their sports streaming joint venture, according to The Athletic.

ISpot gets U.S. JIC-certified:

After fellow measurement currency contenders Comscore and VideoAmp received certification from the U.S. Joint Industry Committee in April, iSpot.tv got the industry group’s stamp of approval this week — including for age-and-gender-based transactions — according to AdExchanger.