While the integration is anticipated to generate around $700 million in future annual expense savings, which Paramount announced last quarter, it also resulted in a programming charge of $1.7 billion in Q1, the company said Thursday.
“In connection with our plan to integrate Showtime into Paramount+ and initiatives to rationalize and right-size our international operations to align with our streaming strategy and close or globalize certain of our international channels, during the first quarter of 2023, we reviewed our content portfolio and determined that we would not use certain content on our platforms,” the company wrote in its letter to shareholders.
“Accordingly, we recorded programming charges, which were comprised of impairment charges for content removed from our platforms or abandoned, development cost write-offs, and contract termination costs,” it added.
As part of the integration, the company previously revealed it would raise subscription prices.
Paramount+ gained 4.1 million subscribers in Q1, bringing the total to 60 million, up from 56 million subs in Q4 2022. The company attributed the global subscriber growth to its robust content library, such as “Star Trek: Picard,” the return of “Mayor of Kingstown,” “Teen Wolf: The Movie” and more.
Paramount also reported Thursday a $1.1 billion loss and revenue of $7.3 billion, missing analyst expectations of $7.4 billion. Meanwhile, Paramount+ revenue increased 65% year-over-year.
During the earnings call, the company said it expects healthy subscription revenue growth over the next several quarters as a result of Paramount+ combining with Showtime.
The company recently announced that it is set to begin production for “Star Trek: Section 31” later this year. The original movie will be the first Star Trek film based on a character from “Star Trek: Discovery” and the first Star Trek movie to center on a single character.
However, its “South Park” streaming rights are uncertain as it’s been sued by Warner Bros. Discovery, which claims Paramount violated the terms of the deal. Paramount is now countersuing the company.
Pluto TV, its free ad-supported streaming service, reached 80 million monthly active users, compared to 78.5 million in the previous quarter.