ViacomCBS the owners of the Ten network in Australia has seen their share value plunge 21% overnight as concerns emerge about their revenue potential and their rebranding transition to Paramount Global in an effort to compete in the fast-changing content streaming market.
The Company missed Wall Street estimates by a wide margin and sparked investor concerns about the cost of its foray into streaming an issue that is also concerning for Stan, Disney, and Netflix investors.
The company that was a late entrant to the crowded video streaming industry, where competitors have already carved out a big slice of the market by pouring billions of dollars into original content like “Money Heist” and blockbuster franchises like “Star Wars” claims Reuters.
Also falling was AMC Networks who shares tumbled as much as 22% — its biggest-ever intraday drop — after forecasting a 10% decline in adjusted operating income as it invests in content, including shows like “Better Call Saul” and “Killing Eve” for its streaming service.
ViacomCBS said Paramount+ added more than 7 million subscribers in the fourth quarter for a total of 32.8 million worldwide. There was no mention of subscription numbers for Australia. The Company said overnight ‘Internationally, Paramount+ had great momentum, reflecting strong global and local content, including local sports such as A-League in Australia’.
Benchmark cut its 2023 free cash flow estimate for ViacomCBS to $229 million, from $1 billion, after the company’s ‘shifting of the goalposts,” according to analyst Daniel Kurnos. “At least it feels like all the cards are on the table now,” he wrote in a note to clients.
