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Media companies and debt.

tall_guy1 said:
I am wondering though if it is underpriced for everything they are pouring into that service. A lot of the Max figures include HBO subscribers. Was a broadcast major, not an finance major, but seems like it would take a lot of subscribers and higher price on the service to break even as it seems like they are doing loss leader pricing.
Click to expand...

I mentioned earlier today----

MAX turned a profit of $103 million last year.
 
michael hagerty said:
I mentioned earlier today----

MAX turned a profit of $103 million last year.
Click to expand...
Beats me how that could be possible. Paramount or Peacock don't have as many subscribers, but not nearly as many or as big of shows and movies to have to account for. (Paramount has 63 million subscribers, while Max has 90-something million. )
 
tall_guy1 said:
Beats me how that could be possible. Paramount or Peacock don't have as many subscribers, but not nearly as many or as big of shows and movies to have to account for. (Paramount has 63 million subscribers, while Max has 90-something million. )
Click to expand...

Thirty million more MAX subscribers paying the base rate of $9.99 (there are also customers paying $16.99 and $20.99 per month, but let's keep it simple) would be:

$299,700,000 (two hundred and ninety nine million, 700 thousand dollars) a month ($3.596 billion a year) more than Paramount IF Paramount charged the same. They don't---Paramount is at $5.99 and $11.99--- so, it's an even bigger gap.

Thats how.

That also shows just how expensive it is to run MAX---we're talking billions in revenue and a profit of $103 million. Fairly low margins, but at this point, profit is profit.
 
michael hagerty said:
Thirty million more MAX subscribers paying the base rate of $9.99 (there are also customers paying $16.99 and $20.99 per month, but let's keep it simple) would be:

$299,700,000 (two hundred and ninety nine million, 700 thousand dollars) a month ($3.596 billion a year) more than Paramount IF Paramount charged the same. They don't---Paramount is at $5.99 and $11.99--- so, it's an even bigger gap.

Thats how.
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LOL! Mike for the win! Can't believe you even did the math for him,
 
michael hagerty said:
Thirty million more MAX subscribers paying the base rate of $9.99 (there are also customers paying $16.99 and $20.99 per month, but let's keep it simple) would be:

$299,700,000 (two hundred and ninety nine million, 700 thousand dollars) a month ($3.596 billion a year) more than Paramount IF Paramount charged the same. They don't---Paramount is at $5.99 and $11.99--- so, it's an even bigger gap.

Thats how.

That also shows just how expensive it is to run MAX---we're talking billions in revenue and a profit of $103 million. Fairly low margins, but at this point, profit is profit.
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One advantage they also have is that all HBO subscribers through cable/satellite also count in their numbers and pay probably closer to the $16 each month. I've had HBO for over a decade through my cable provider, and get Max "for free" along with the HBO channels on cable.
 
tall_guy1 said:
Paramount Chiefs to Staff: We’re Cutting $500M In Costs After “Unacceptable” Profit Drops So yeah, not a whole lot we didn't know before...would have thought bigger news would be shared today at the town hall for Paramount Global.
Click to expand...

It appears that getting to that number involves wherever they can save a buck. That includes digital storage costs:

variety.com

MTV News Website Goes Dark, Archives Pulled Offline

The website of the already-defunct MTV News has been fully pulled offline.
variety.com variety.com
 
tall_guy1 said:
Would have thought a merger or something would have been announced today on streaming, but only that they're looking around.
Click to expand...

Look how long the Sundance negotiations took. They're back at square one. They'll have a deal to announce when there's one.

Meantime, cost-cutting and increasing subscriber prices sends a message to the markets. Today was intended to influence the stock price.
 
PTBoardOp93 said:
They haven't run out of money yet.

Paramount has $30 billion in liabilities (debts and accounts payable), but $52 billion in cash and assets.
WB-Discovery has $77 billion in liabilities, but $123 billion in assets.
Disney has $97 billion in liabilities but $205 billion in assets.

There are two basic rules in finance:
1. Profitable companies don't go bust
2. Until your debts exceed your assets, you can borrow additional funds.

Of the three, only Disney was profitable last year, but all three have significant assets.

There may be a question as far whether the film studios (Paramount Pictures, Warner Bros., Disney/Pixar) and the television assets belong together long-term, but there is little chance of insolvency right now.

Yes, it's really amazing how these big media companies manage all this debt. I suppose it depends a lot on cash flow and keeping investors confident that the profits will come later. It's similar to how some online platforms operate on small margins but still attract users and stay in business. Like these casinos https://icasinoreviews.co.nz/4-dollar-deposit-casinos/ with low deposits that only need $4 to get started. They rely on volume and customer loyalty, just as media giants depend on subscribers and license agreements. It's risky, but if the strategy works, it can pay off in the long run.
Click to expand...
Assets still outweigh liabilities, so bankruptcy isn't imminent, though profitability trends will matter more over time!
 
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