ViacomCBS Boosts U.S. Streaming Subs Target, Production "Almost Back to Normal"

ViacomCBS CEO Bob Bakish
Jesse Grant/Getty Images

ViacomCBS CEO Bob Bakish

Its new CFO forecasts "at least 19 million" by the end of 2020, while CEO Bob Bakish touts successes that have given the firm confidence to "lean into streaming even more."

ViacomCBS on Friday boosted its domestic paid streaming subscriber forecast for the year.

CEO Bob Bakish on the company's third-quarter earnings conference call touted streaming momentum, before new CFO Naveen Chopra said management now expects to end 2020 with "at least" 19 million U.S. paid streaming subscribers.

The firm, created in December via the recombination of Viacom and CBS Corp., had in its second-quarter earnings update raised its U.S. paid streaming subscriber target to 18 million from 16 million. But the company had ended the third quarter through Sept. 30 with 17.9 million subs, which Bakish on the call described as a result of momentum at both CBS All Access and Showtime's streaming offering.

CBS All Access is "in the early stages" of benefitting from the Viacom-CBS merger with more to come, he said, lauding "compelling content and ubiquitous distribution" as key drivers of paid streaming subscriber growth. ViacomCBS previously said it would early next year broaden and beef up its U.S. subscription VOD service CBS All Access and rebrand it under the Paramount+ name.

Bakish, on the call, touted a recent reshuffle of its streaming team and said that and the upcoming Paramount+ launch would ensure a new leg of growth in the streaming business, describing the goal as making the streamer a "must-watch" service. A first broadening of the streaming service this summer gave management the confidence to "lean into streaming even more," he said.

Meanwhile, the company's advertising-supported streaming service Pluto TV, which is being rolled out in new countries internationally, also continues to grow. "The trend line is compelling," Bakish said on the call, lauding it for recently seeing its first $3 million advertising day. He reiterated that Pluto TV would end 2020 with the targeted 30 million-plus users in the U.S. and 40 million users, when including international.

Friday's analyst call was the first earnings call appearance by new ViacomCBS CFO Chopra, a former Amazon executive. Bakish lauded him for bringing a "fresh perspective."

Chopra said that, after three months at the company, he "finds himself even more bullish" about the firm's outlook. ViacomCBS has "exceeded my expectations" on such issues as taking advantage of merger synergies and doing better in streaming than people realize, he said. He also lauded the company's "world-class" content creation ability, including for the digital generation, and promised a "compelling" return on investment in the streaming business.

Previously, Chopra spent two years as CFO of audio streamer Pandora where he even served, for a period, as interim CEO. During his tenure, the company launched its Pandora Premium subscription service. Prior to that, he served in a number of senior positions at TiVo, including four years as CFO and a stint as interim CEO.

Bakish on Friday's call touted the progress on "unlocking" the benefits of last December's Viacom-CBS merger. It has strengthened the combined firm's advertising and carriage businesses, and "we're just getting going," he said. And he touted third-quarter results as an acceleration of business momentum.

Looking ahead, the CEO also expressed confidence. "Our content position is strong," Bakish said about the return of TV productions after novel coronavirus pandemic shutdowns, adding later production was "almost back to normal" for the company after "extraordinary" progress in the past quarter. And he said that "big-picture" ad momentum was "moving in the right direction."

Chopra said ViacomCBS expects advertising trends to further improve in the fourth quarter as the sector recovers from the coronavirus pandemic after the third quarter brought a narrowed year-over-year drop of 6 percent. Bakish said he felt good about this year's advertising upfront market and the momentum with which the company is exiting it and moving into 2021.

Chopra also said the firm expects to end 2020 with an annual revenue run-rate in its streaming business of $2.8 billion.

ViacomCBS' management didn't share any new timing on the planned sales of publishing unit Simon & Schuster and the Black Rock headquarters building in Manhattan.

Company shares in early Friday trading were down 3.1 percent to $30.31.