(Reuters) – ViacomCBS Inc <VIACA.O> on Friday raised its annual paid subscriber forecast for its streaming services, after nearly hitting its previous target a full quarter ahead of time on strong demand for indoor entertainment during the pandemic.
The company now expects to hit 19 million domestic subscriptions by the year-end for its streaming services, CBS All Access and Showtime, compared to its earlier estimate of 18 million. Subscriptions stood at 17.9 million at the end of the third quarter
The services had significant growth in sign-ups, the company said, as CBS All Access benefited from strong demand for sports content and Showtime OTT from shows like “The Chi” and “Billons”.
ViacomCBS competes in a crowded U.S. video streaming market with dominant players such as Netflix <NFLX.O> with close to 200 million global customers and Walt Disney Co <DIS.N>, which has more than 100 million global paid customers for its streaming services.
Revenue from streaming and digital video at ViacomCBS surged 56% to $636 million in the third quarter, helped by a more than doubling of ad sales from its free, ad-supported Pluto TV.
Overall advertisement revenue, however, fell 6%, but improved from a 27% plunge in the second quarter.
Revenue in the company’s filmed entertainment division, which includes Paramount Pictures, tumbled 31%, primarily due to lower licensing revenue and theater closures, including limited seating, across the United States and Europe.
Total revenue fell 9% to $6.12 billion, but came in above estimates of $5.94 billion, according to Refinitiv IBES data.
Excluding items, the company earned 91 cents per share, beating estimates of 80 cents.
The company’s shares were down 2%, as broader markets slipped after a strong rally this week. Shares of Netflix Inc <NFLX.O>, Walt Disney Co <DIS.N> and Comcast Corp <CMCSA.O> were also down in early trading.
(Reporting by Ayanti Bera in Bengaluru and Kenneth Li in New York; Editing by Sriraj Kalluvila)