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 the annual reportable segment profit margin data reveals several distinct trends across the different segments for the periods ending December 31, 2018, through December 31, 2022.
- TV Media Segment
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This segment shows a consistent decline in profit margin over the observed periods. The margin decreased from 27.54% in 2020 to 25.92% in 2021, and further to 25.08% in 2022. Despite the marginal declines, the segment maintains a relatively strong positive margin, indicating continued profitability, albeit with slight erosion over time.
- Direct-to-Consumer Segment
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The Direct-to-Consumer segment exhibits a markedly negative trend throughout the periods available, with profit margins deepening in deficit. In 2020, the margin stood at -9.42%, deteriorating to -29.82% in 2021, and reaching -37.09% in 2022. This trajectory indicates increasing losses and could suggest challenges in scaling this segment or high costs associated with direct consumer engagement.
- Filmed Entertainment Segment
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The Filmed Entertainment segment reflects a moderate yet positive growth in profit margin. From 6.40% in 2020, the margin rose to 7.70% in 2021 but then experienced a slight decline to 7.34% in 2022. Although the decline is minor in the last period, the overall trend from 2020 to 2022 remains positive, suggesting improved operational efficiency or revenue growth in this segment.
Overall, the data points to a stable but slightly declining profitability in the TV Media segment, significant challenges in the Direct-to-Consumer segment with expanding losses, and steady positive growth in the Filmed Entertainment segment with a minor recent dip.
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%
- Adjusted OIBDA
- The Adjusted OIBDA figures show a moderate fluctuation over the three most recent years. In 2020, adjusted OIBDA was recorded at $5,816 million, which slightly increased to $5,892 million in 2021. However, in 2022, there was a noticeable decline to $5,451 million, indicating a reduction in operational profitability after the previous year's growth.
- Revenues
- Revenue demonstrated a growth trend from 2020 to 2021, rising from $21,120 million to $22,734 million. This positive momentum reversed in 2022, as revenues declined to $21,732 million. Despite the dip, the 2022 revenue remained higher than the 2020 figure, suggesting overall growth over the three-year period but with recent contraction.
- Segment Profit Margin
- The segment profit margin declined consistently over the observed period. Starting at 27.54% in 2020, it decreased to 25.92% in 2021 and further dropped to 25.08% in 2022. This downward trend indicates a gradual erosion of profitability ratios relative to revenues.
- Overall Analysis
- The data reveal that despite initial revenue growth from 2020 to 2021, both adjusted OIBDA and segment profit margin show signs of pressure starting in 2022. The decline in adjusted OIBDA alongside decreasing profit margins suggests operating costs or other expenses may have increased relative to revenues, reducing overall profitability. The slight fall in revenues in 2022 compounds these concerns. The segment appears to be facing challenges in maintaining its profit margins even as revenues fluctuate.
Segment Profit Margin: Direct-to-Consumer
Paramount Global; Direct-to-Consumer; segment profit margin calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ 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 financial data for the Direct-to-Consumer segment reveals significant changes over the years presented. Revenues have exhibited strong growth, increasing from $1,815 million in 2020 to $3,327 million in 2021, and further to $4,904 million in 2022. This upward trajectory indicates substantial expansion in top-line performance within this period.
Despite the increasing revenues, the segment's adjusted operating income before depreciation and amortization (OIBDA) has deteriorated considerably. The adjusted OIBDA moved from a deficit of $171 million in 2020 to a larger loss of $992 million in 2021, and then to an even more pronounced loss of $1,819 million in 2022. This sharp decline reflects escalating operating costs or investments that have outpaced revenue growth.
The segment profit margin corroborates the worsening profitability. It stood at -9.42% in 2020, deteriorated further to -29.82% in 2021, and declined to -37.09% by 2022. The increasing negative margin suggests that expenses related to the segment have grown disproportionately relative to revenues, negatively impacting overall efficiency and profitability.
In summary, while there is clear evidence of strong revenue growth in the Direct-to-Consumer segment, this has been accompanied by increasingly substantial losses and declining profit margins. The trends highlight a scenario where expansion in sales volume has come with significant cost or investment burdens, exerting pressure on the segment’s profitability.
Segment Profit Margin: Filmed Entertainment
Paramount Global; Filmed Entertainment; segment profit margin calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ 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%
- Revenues
- The segment revenues demonstrated consistent growth over the three-year period from 2020 to 2022. Beginning at $2,470 million in 2020, revenues increased by 8.7% to $2,687 million in 2021, followed by a significant rise of 37.9% to $3,706 million in 2022. This reflects a substantial expansion in the segment's top line, particularly notable in the latest year.
- Adjusted OIBDA
- Adjusted Operating Income Before Depreciation and Amortization followed an upward trajectory parallel to revenues. Starting at $158 million in 2020, it rose by 31% to $207 million in 2021 and further increased by 31.4% to $272 million in 2022. This consistent growth indicates improving operational earnings within the segment.
- Segment Profit Margin
- The segment profit margin improved from 6.4% in 2020 to 7.7% in 2021, representing a favorable enhancement in profitability. However, in 2022, the margin slightly decreased to 7.34%, indicating a modest compression despite higher absolute profit and revenue levels. Overall, the margin remains in a range suggesting stable profitability.
- Overall Analysis
- The segment exhibited strong financial performance over the reported period, with meaningful revenue and adjusted OIBDA growth. The profitability margin showed improvement initially but experienced a slight decline in the most recent year. The growth in absolute profit and revenue suggests effective scaling, while the small margin reduction may imply increased costs or investments impacting profit efficiency.
Revenues
Paramount Global, revenues by reportable segment
US$ 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).
The data on annual reportable segment revenues indicates a general upward trend over the most recent periods presented, from 2020 to 2022.
- TV Media
- This segment shows a peak in revenues in 2021 with US$21,120 million, followed by a slight decrease to US$21,732 million in 2022. Despite the minor decline in the last year, overall revenues remain relatively stable, maintaining a strong contribution to total revenues.
- Direct-to-Consumer
- There is a significant and consistent growth in this segment’s revenues, rising from US$1,815 million in 2020 to US$3,327 million in 2021, and further increasing to US$4,904 million in 2022. This reflects an expanding focus and success in direct-to-consumer offerings, signaling a strategic growth area.
- Filmed Entertainment
- Revenues in this segment have also exhibited growth, increasing from US$2,470 million in 2020 to US$2,687 million in 2021, and then to US$3,706 million in 2022. This upward trajectory highlights strengthening performance in filmed entertainment activities.
- Corporate/Eliminations
- The Corporate/Eliminations segment shows consistent negative values, with a gradual increase in magnitude from -US$120 million in 2020 to -US$188 million in 2022. These negative figures are typical for eliminations and corporate costs and appear to be increasing modestly over time.
- Total Revenues
- Total revenues reflect steady growth, rising from US$25,285 million in 2020 to US$28,586 million in 2021, and reaching US$30,154 million in 2022. This steady increase is primarily driven by the strong performance in Direct-to-Consumer and Filmed Entertainment segments, alongside the relatively stable TV Media segment.
Overall, the company displays a positive revenue growth trajectory, with a notable shift toward expanding its Direct-to-Consumer offerings, while maintaining solid revenue generation in traditional TV Media and filmed entertainment sectors. The gradual increase in corporate eliminations is consistent with operational scaling and possibly integration efforts.
Adjusted OIBDA
Paramount Global, adjusted oibda by reportable segment
US$ 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).
- TV Media Segment Adjusted OIBDA
- The TV Media segment shows a stable performance in the two years with data available. From 2021 to 2022, the adjusted OIBDA increased slightly from 5,816 million US$ to 5,892 million US$, before declining to 5,451 million US$ in 2022. This indicates a minor peak in 2021 followed by a reduction in profitability in 2022, though the values remain robust overall.
- Direct-to-Consumer Segment Adjusted OIBDA
- The Direct-to-Consumer segment presents a consistent negative adjusted OIBDA over the reported periods, with losses widening substantially each year. In 2020, the segment reported a negative 171 million US$, which deepened to a negative 992 million US$ in 2021, and further to a negative 1,819 million US$ in 2022. This trend demonstrates increasing investment or rising costs without corresponding profitability in this area.
- Filmed Entertainment Segment Adjusted OIBDA
- The Filmed Entertainment segment shows a positive and growing adjusted OIBDA across the years reported. Starting at 158 million US$ in 2020, it increased to 207 million US$ in 2021 and further to 272 million US$ in 2022. This indicates a steady improvement in profitability and contribution to the overall business.
- Corporate/Eliminations Adjusted OIBDA
- Corporate/Eliminations figures remain negative but relatively stable. The adjusted OIBDA was negative 485 million US$ in 2020, slightly fluctuating to negative 491 million US$ in 2021, and improving marginally to negative 470 million US$ in 2022. This suggests consistent overhead or inter-segment eliminations impacting the total results.
- Total Adjusted OIBDA
- The total adjusted OIBDA shows a declining trend over the three reported years. It decreased from 5,318 million US$ in 2020 to 4,616 million US$ in 2021, and further down to 3,434 million US$ in 2022. Despite growth in the Filmed Entertainment segment, the overall reduction is primarily driven by the widening losses in Direct-to-Consumer and the slight decrease in TV Media segment profitability.