Paramount+ Eyes Growth Under New Leadership
David Ellison, CEO of Paramount, is outlining his vision for the future of the entertainment company, following the completion of Skydance’s takeover. In a shareholder letter accompanying the release of the company’s third quarter earnings on Monday,Ellison stated that scaling the direct-to-consumer business is the “top priority,” alongside “supercharging” creative output.
Paramount is targeting $30 billion in revenue by 2026, supported by $3 billion in cost savings – an increase from the previously announced $2 billion. The company reported $6.7 billion in Q3 revenue, with an operating income of $324 million and a net loss of $257 million, though losses have begun to decrease as the Skydance acquisition.
A “complete strategic review” is underway to identify potential divestitures of non-core assets, starting with Telefe in Argentina. The company will also adjust its earnings reporting structure in Q1 to better reflect its focus on direct-to-consumer, TV media, and studios.
Direct-to-consumer revenue saw a 17% surge in Q3,reaching $2.1 billion, while the TV division experienced a 12% decline due to advertising and subscription challenges. Paramount+ subscriber numbers climbed to 79.1 million, up from 77.7 million the previous quarter, with plans to increase pricing in early 2026.
Ellison emphasized a long-term strategy involving strategic changes and investments to achieve the company’s goals. He also highlighted an chance to improve topline growth and close the gap in profit margins and free cash flow conversion compared to other leading media companies.
Content spending is set to increase, with planned investments exceeding $1.5 billion next year, focusing on UFC, scripted content, and feature films. Regarding potential mergers and acquisitions, notably in light of reports about a bid for Warner Bros. Revelation, Ellison indicated a preference for organic growth, emphasizing the company’s ability to “build” what it needs and approaching acquisitions cautiously.He stated, “There’s no must-haves for us.”