Analysis of Reportable Segments
Paramount Global operates in 3 segments: TV Media; Direct-to-Consumer; and Filmed Entertainment.
Segment Profit Margin
Paramount Global, profit margin by reportable segment
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| TV Media | 25.08% | 25.92% | 27.54% | — | — |
| Direct-to-Consumer | -37.09% | -29.82% | -9.42% | — | — |
| Filmed Entertainment | 7.34% | 7.70% | 6.40% | — | — |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
The analysis of segment profit margins reveals a stark divergence in performance between traditional media assets and the expanding digital distribution infrastructure. While legacy segments maintain profitability, the direct-to-consumer trajectory indicates significant capital intensity and operational losses during the scaling phase.
- TV Media
- A consistent downward trend in profit margins is observed over the three-year period. The margin contracted from 27.54% in 2020 to 25.08% by the end of 2022. This gradual erosion suggests increasing operational costs or pricing pressures within the traditional television landscape, although the segment remains the primary contributor to overall profitability.
- Direct-to-Consumer
- This segment exhibits a severe and accelerating decline in profit margins. Starting at -9.42% in 2020, the margin deteriorated to -29.82% in 2021 and reached -37.09% in 2022. The widening negative margin reflects substantial investments in content acquisition and subscriber growth, highlighting a period of aggressive expansion that outweighs current revenue generation.
- Filmed Entertainment
- The profit margins for this segment remained relatively stable and low compared to TV Media. An initial increase from 6.40% in 2020 to 7.70% in 2021 was followed by a slight retraction to 7.34% in 2022. This volatility is minimal, indicating a consistent, albeit modest, level of profitability within the film production and distribution business.
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Segment Profit Margin: TV Media
Paramount Global; TV Media; segment profit margin calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Adjusted OIBDA | 5,451) | 5,892) | 5,816) | —) | —) |
| Revenues | 21,732) | 22,734) | 21,120) | —) | —) |
| Segment Profitability Ratio | |||||
| Segment profit margin1 | 25.08% | 25.92% | 27.54% | — | — |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Segment profit margin = 100 × Adjusted OIBDA ÷ Revenues
= 100 × 5,451 ÷ 21,732 = 25.08%
The TV Media segment experienced a consistent contraction in its segment profit margin over the three-year period from 2020 to 2022. While revenue and Adjusted OIBDA showed fluctuations, the overall trend indicates a steady decline in operational profitability relative to total revenue.
- Revenue Performance
- Revenues increased from US$ 21,120 million in 2020 to a peak of US$ 22,734 million in 2021, representing a growth phase. However, this trend reversed in 2022, with revenues declining to US$ 21,732 million.
- Adjusted OIBDA Trends
- Adjusted OIBDA remained relatively stagnant between 2020 and 2021, moving from US$ 5,816 million to US$ 5,892 million. In 2022, a notable decrease occurred, with the figure falling to US$ 5,451 million.
- Segment Profit Margin Analysis
- The segment profit margin followed a continuous downward trajectory, decreasing from 27.54% in 2020 to 25.92% in 2021, and further to 25.08% in 2022. This persistent erosion suggests that operating expenses grew at a faster rate than revenues in 2021, and that profitability contracted more sharply than revenue during the downturn in 2022.
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Segment Profit Margin: Direct-to-Consumer
Paramount Global; Direct-to-Consumer; segment profit margin calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Adjusted OIBDA | (1,819) | (992) | (171) | —) | —) |
| Revenues | 4,904) | 3,327) | 1,815) | —) | —) |
| Segment Profitability Ratio | |||||
| Segment profit margin1 | -37.09% | -29.82% | -9.42% | — | — |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Segment profit margin = 100 × Adjusted OIBDA ÷ Revenues
= 100 × -1,819 ÷ 4,904 = -37.09%
The Direct-to-Consumer segment exhibits a pattern of aggressive revenue expansion coupled with a proportional increase in operating losses from 2020 through 2022. While the top-line growth is substantial, the segment has failed to achieve economies of scale, resulting in a significant deterioration of the profit margin over the analyzed period.
- Revenue Trajectory
- A strong upward trend in revenues is observed, increasing from US$ 1,815 million in 2020 to US$ 4,904 million in 2022. This represents a significant growth in the segment's market reach and scale of operations over the three-year window.
- Adjusted OIBDA Performance
- Operating losses have widened considerably, accelerating from a deficit of US$ 171 million in 2020 to US$ 1,819 million by the end of 2022. The pace of loss acceleration has outstripped the pace of revenue growth, indicating that operating expenses increased at a higher rate than income.
- Segment Profit Margin Analysis
- The segment profit margin shows a continuous downward trend, moving from -9.42% in 2020 to -29.82% in 2021, and finally reaching -37.09% in 2022. This negative margin expansion suggests that for every dollar of revenue generated, the cost of delivery and operation increased substantially, highlighting a period of intensive investment or inefficiency in the cost structure of the Direct-to-Consumer model.
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Segment Profit Margin: Filmed Entertainment
Paramount Global; Filmed Entertainment; segment profit margin calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Adjusted OIBDA | 272) | 207) | 158) | —) | —) |
| Revenues | 3,706) | 2,687) | 2,470) | —) | —) |
| Segment Profitability Ratio | |||||
| Segment profit margin1 | 7.34% | 7.70% | 6.40% | — | — |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Segment profit margin = 100 × Adjusted OIBDA ÷ Revenues
= 100 × 272 ÷ 3,706 = 7.34%
The Filmed Entertainment segment demonstrated consistent growth in absolute financial terms from 2020 through 2022, characterized by a steady increase in both revenues and Adjusted OIBDA. While top-line and bottom-line figures trended upward, the segment profit margin experienced a non-linear progression, peaking in 2021 before undergoing a slight contraction in 2022.
- Revenue and Adjusted OIBDA Growth
- Revenues increased from 2,470 million USD in 2020 to 3,706 million USD by the end of 2022, representing a substantial expansion in the segment's scale. In parallel, Adjusted OIBDA rose consistently over the three-year period, growing from 158 million USD in 2020 to 207 million USD in 2021, and reaching 272 million USD in 2022.
- Segment Profit Margin Analysis
- The profit margin improved from 6.40% in 2020 to 7.70% in 2021, indicating an increase in operational efficiency during that interval. However, in 2022, the margin declined to 7.34%. This decline occurred despite the most significant year-over-year increase in revenues, suggesting that the costs associated with generating the additional revenue in 2022 grew at a faster rate than the corresponding Adjusted OIBDA.
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Revenues
Paramount Global, revenues by reportable segment
US$ in millions
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| TV Media | 21,732) | 22,734) | 21,120) | —) | —) |
| Direct-to-Consumer | 4,904) | 3,327) | 1,815) | —) | —) |
| Filmed Entertainment | 3,706) | 2,687) | 2,470) | —) | —) |
| Corporate/Eliminations | (188) | (162) | (120) | —) | —) |
| Total | 30,154) | 28,586) | 25,285) | —) | —) |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
Total revenue exhibited a steady upward trend from 2020 to 2022, rising from US$ 25,285 million to US$ 30,154 million. This overall growth reflects a strategic shift in revenue composition, where substantial gains in digital and film distribution mitigated the volatility observed in the traditional television media segment.
- TV Media Performance
- As the primary revenue contributor, TV Media experienced a peak of US$ 22,734 million in 2021 before declining to US$ 21,732 million in 2022. This contraction in the final year indicates a potential plateau or decline in traditional broadcast and cable revenue streams.
- Direct-to-Consumer Expansion
- The Direct-to-Consumer segment demonstrated the most aggressive growth profile, increasing from US$ 1,815 million in 2020 to US$ 4,904 million in 2022. This represents a total increase of approximately 170% over the period, highlighting a rapid scaling of streaming services and digital subscriptions.
- Filmed Entertainment Trends
- Revenues within Filmed Entertainment grew consistently, moving from US$ 2,470 million in 2020 to US$ 3,706 million in 2022. The growth accelerated between 2021 and 2022, suggesting a strong recovery or expansion in theatrical and home entertainment distribution.
- Corporate and Eliminations
- Corporate eliminations increased in magnitude from US$ -120 million in 2020 to US$ -188 million in 2022, though these values remained marginal relative to the total consolidated revenue.
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Adjusted OIBDA
Paramount Global, adjusted oibda by reportable segment
US$ in millions
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| TV Media | 5,451) | 5,892) | 5,816) | —) | —) |
| Direct-to-Consumer | (1,819) | (992) | (171) | —) | —) |
| Filmed Entertainment | 272) | 207) | 158) | —) | —) |
| Corporate/Eliminations | (470) | (491) | (485) | —) | —) |
| Total | 3,434) | 4,616) | 5,318) | —) | —) |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
Total Adjusted OIBDA exhibited a consistent downward trajectory from 2020 to 2022, decreasing from US$ 5,318 million to US$ 3,434 million. This overall contraction is primarily driven by expanding losses within the Direct-to-Consumer segment, which offset the positive contributions of the TV Media and Filmed Entertainment divisions.
- TV Media Performance
- This segment serves as the primary source of positive Adjusted OIBDA. While performance remained relatively stable between 2020 and 2021, a decline occurred in 2022, with values falling to US$ 5,451 million from a peak of US$ 5,892 million in 2021.
- Direct-to-Consumer Financial Trend
- A significant negative trend is observed in this segment, characterized by rapidly accelerating losses. Adjusted OIBDA moved from a loss of US$ 171 million in 2020 to a loss of US$ 1,819 million by 2022, indicating an aggressive increase in operational costs or investment expenditures.
- Filmed Entertainment Growth
- This segment demonstrated steady year-over-year growth. Adjusted OIBDA increased consistently from US$ 158 million in 2020 to US$ 272 million in 2022, although its total contribution remains marginal relative to the other segments.
- Corporate and Eliminations
- Costs associated with Corporate and Eliminations remained stable over the analyzed period, fluctuating narrowly between US$ -470 million and US$ -491 million.
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