Naveen Chopra: Yes, Ben, with respect to your comment on long-term content spending, I won’t answer it in the context of 2024 specifically because, as you know, 2023 and 2024 are going to be materially impacted by the effect of the strikes. And I think what you’re actually more interested in is what is the sort of more organic long-term trend. And to that, I would say that we’ve got a long-term baseline in which cash content spend grows at low-single-digits. However, as I noted last quarter, our long-term content strategy is not about solving for some specific volume of content. It’s about having the right content for the right audience at the right time. And we are laser-focused on continuing to find ways to further improve the efficiency of our content spend in both linear and streaming, and there’s a variety of things that we’re doing to accomplish that.
It includes things like finding new ways to leverage content across both our streaming and linear platforms across geographies. You’ve seen us do a lot of that over the course of the last couple of quarters. It includes leading into franchises, which are fundamentally more efficient from the perspective of building awareness, driving engagement and such and it includes leveraging partners for local content, particularly in smaller international markets, as you heard Bob mention earlier. And now we’ve got a whole lot of data that we’re able to use to better understand how to super serve these key audience segments in the most efficient way possible. So when you put all those initiatives together, from my perspective, it means there’s an opportunity to improve the long-term growth rate of cash content spend relative to that low single-digit baseline.
Jaime Morris: Thanks, Ben. Operator, next question please.
Operator: Our next question goes to Jessica Reif Ehrlich of Bank of America. Jessica, please go ahead. Your line is open.
Jessica Reif Ehrlich: Two may retail. So first, impairment appears to have walked away from a number of potential asset sales in the last year or so. What would you consider the optimal portfolio mix for Paramount? And then just on advertising, advertising for DTC grew 18%, but you’re viewing hours were up 46%. I’m not sure what’s Paramount+ and what’s Pluto, but maybe you can talk about what — it is a tepid market, but how do you think you can close that gap?
Bob Bakish: Yes. Sure, Jessica. I’ll take those. Look, on the — weird echo. On the M&A side, two points. One is we continue to look to non-core asset dispositions, and we do that principally as a value unlock to reduce leverage. And that was clearly the case with Simon & Schuster and we continue to look at some additional opportunities, but I’m not going to comment on anything specific in that regard. I think second, on a big picture level, we’ve really honed the core asset composition of this company, and it is dare I say, strategic and logical. It’s fundamentally long-form video-centric both with robust production and very large libraries and our clear synergies in terms of how we maximize revenue and drive operating efficiency across the business.
So again, these pieces work together. That said, when it comes to M&A, we’re always open-minded, and we look at opportunities — potential opportunities through the lens of really how can we maximize shareholder value. In terms of the ad market and the digital ad market, in particular, as you know, digital growth was 18% in the quarter. Quite strong in the grand scheme of things. It is a meaningful business for us in terms of size. IQ, which is the fundamental trading umbrella for it. It’s a multibillion dollar business. Product reaches over 100 million full episode viewers in the U.S. So, it’s a very meaningful complement to linear. We’re doing a number of things, which gets to your question, to continue to drive this going forward, and they really tied it to both the supply side and the demand side.
On the supply side, we are focused on continuing to grow engagement. And as you point out, viewing hours grew 46% in the third quarter. We’re also going to launch Paramount+ Essential on Amazon. That will be an additional inventory creation vehicle. And as we noted in our remarks, we’re expanding internationally both in the context of Pluto TV and Paramount+ ad-supported peers, including what we’re doing in the BVOD space in some of our broadcast markets. So, we’ll unquestionably grow supply, then we go to the demand side, i.e., filling that supply with advertising business. Start with the undeniable appeal of premium content to advertisers and we do deliver it in a brand-safe, high-quality environment and we prosecute that and facilitate access to it through both direct and programmatic channels, making us easy to do business.
We are also enhancing the quality of what we call signal, and that’s increasing the amount of data associated with streaming consumption and that enables more precise campaigns for marketers. We believe that’s important to monetizing the incremental inventory we’re creating. And we’ll also have a whole initiative targeting the SMB sector, small and medium-sized business. That’s bringing new advertisers into our digital video ecosystem and also giving them improved self-service tools, that’s been growing plus. We see a lot of potential there. And we’re actually adding some incremental expertise to the sales force to prosecute it. So, we’re doing a bunch of things to ensure that we’re continuing to create supply, maintain our scale position in this market and then drive the monetization by increasing further the appeal of that to our clients and their respective agencies.
And I’m quite confident that, that combination will serve us well in the marketplace in 2024 and beyond.
