With a mega-merger looming, Paramount is shining a spotlight on its direct-to-consumer (DTC) growth and profitability this quarter, as other segments like theatrical and TV slipped.

In the Q3 financial report it released this morning, the media giant’s total quarterly revenue came in at US$6.73 billion, which is down 6% from the same period last year (US$7.13 billion).

Paramount+ logged 3.5 million new subscribers this quarter (to hit a total of 72 million), and the platform’s discrete revenue was up by 25%, thanks to this expansion and subscription pricing increases. By comparison, though, overall DTC revenue only increased by 10% versus Q3 2023, coming in at US$1.86 billion. Factors that contributed to this growth included greater ad revenue from Paramount+ and Pluto TV. 

Achieving a DTC profit of US$49 million (compared to Q3 2023’s US$238-million loss), this is the second profitable quarter in a row for the segment.

“[Across] the company, we continue to successfully execute non-content cost reductions that will result in US$500 million in annual run rate savings,” said co-CEOs George Cheeks, Chris McCarthy and Brian Robbins in a statement. “With two very strong quarters under our belt, it’s evident that we have clear momentum, and that our plan is working, thanks to our very talented teams and creative partners.”

It’s been a slower box-office season for Paramount, and theatrical revenue was down by 71% compared to last year’s Q3—which was buoyed by buzzy kids releases like Teenage Mutant Ninja Turtles: Mutant Mayhem (US$180.5 million) and Paw Patrol: The Mighty Movie (US$205 million).

This quarter, the studio’s biggest younger-skewing movie opening was Transformers One (pictured) in September. Despite critical acclaim, this first CG-animated film based on Hasbro’s iconic toy line has only grossed about US$128 million against a budget in the range of US$75 million to US$147 million.

TV revenue fell by 6% in Q3 to US$4.3 billion, which is not surprising given the challenges of the broader linear television landscape. But in a more promising light, this year’s MTV Video Music Awards (featuring performances from teen favorites like Sabrina Carpenter and Chappell Roan) attracted its biggest audience in four years.

It’s worth noting that this is Paramount’s second financial report since entering into a Skydance merger agreement that’s expected to close in the first half of 2025. To achieve annualized cost savings, layoffs targeting 15% of its US workforce and the August closure of Paramount Television Studios (Time Bandits) played out in this quarter.