Paramount Skydance Corporation (PARA) Earnings Call Transcript & Summary

Good day, I'm Vijay Jayant, the media and telecom at Evercore ISI. I'd like to welcome Bob Bakish, the President and CEO of ViacomCBS. Thanks for joining our first inaugural TMT Conference, Bob.

Great to be here, Vijay. Thanks for having us.

Bob, in the next 35 minutes, I wanted to go through pretty much across your business lines, but I'll probably start with the streaming side of the business, which I think is about 15% of revenues, but growing about 60%. I think the most topical question that we're getting right now is, given the recent M&A that you've probably seen: Warner Media Discovery; Amazon, MGM; global scale and breadth and depth of content seems to be paramount, no pun intended, in the streaming business. In this dynamic market, do you feel like you can go at this independently? Most of your global competitors seem to have sort of [ lost ] companies with pretty substantial content wallets. Is it sort of going to get bigger, spend bigger or get out? Is this the way this sort of plays out?

Yes. So look, your on ramp to the question is M&A., but your core question is whether ViacomCBS can be successful in streaming in its current configuration. So let's focus on that. In short, the answer is definitely yes. And I say that for 3 reasons:First, we have a truly differentiated strategy. Second, we have tremendous momentum. And third, we are one of the largest content producers in the world. And just to give you more sense of all those, let's dig in a little, starting with our differentiated strategy. We fundamentally believe a strategy which spans free, pay and premium is powerful. It's true stand-alone in each of those sectors, and it's definitely true in combination. Now I could talk about that at light, but let's consider, as an example, how it applies to distribution. Because by having these different private products in different price points, including free, it allows the distributors to serve a wider range of their customers who each have -- or their sectors who have different needs. And it also importantly allows us to execute against different business models. And that really, when you're putting together a deal with a distributor, that really matters because they all have different sets of objectives. So that's strategy. That's nice. But let's talk about the second point, which is momentum. Our momentum at ViacomCBS is strong, and it's clearly visible. You go back to our Q1 call, we finished with 36 million streaming subs globally and nearly 50 million Pluto TV MAUs. And you flash this number, that delivered streaming revenue growth of 65% year-over-year. And as we said on our call, we expect further acceleration on the revenue growth side in the second quarter. So that momentum clearly says to me, and I hope it says to all your constituencies, our strategy is definitely working. And equally and perhaps more important, it's evidence of our company's strong ability to execute [indiscernible] because strategy is nice, but you got to have the rubber meet the road, and that's where you deliver, and that's where you start to see real evidence of success in terms of momentum. But when you step back and think about all this over the longer term, it's really the third point, which is content, which is what really matters. And here, our credit is very strong. You look at ViacomCBS, we are a proven hit-maker; and that's across formats. That's across genres: kids, news, et cetera. That's across demographics. And frankly, it's across countries. And our level of spend is very material. We spend about $15 billion a year on content, which makes us one of the largest producers of content on the planet. And all of that increasingly feeds our streaming ecosystem. One thing it does is it brings to life this differentiated Paramount+ positioning: Live sports, breaking news and a mountain of entertainment. And it's not just Paramount+, it's also Pluto. It's a core part of the 150,000 -- really, in excess of 150,000 hours we have on Pluto TV, not to mention the 30,000 episodes we have on Paramount+. And that content production capability is the driver of a rapidly growing slate of exclusive originals on Paramount+. And we've talked about these numbers even pre our capital raise: 36 original series this year, going over 50 next year; a large volume of movies, particularly in '22. And it's the content at that level of quality and scale that is ultimately what drives success in streaming. It is an extremely scarce and valuable asset, and it is the core of what ViacomCBS is. And then just to close it out, since you mentioned it, on size, I wanted that we do have very substantial financial capacity that allows us to spend the $15 billion on content, our balance sheet is in great shape. We're only levered 2.2x, and that's before we collect the $2 billion of cash when the Simon & Schuster deal closes later this year, and that's before a further asset [ sales ] like our Black Rock facility. That financial equation gives us tremendous flexibility to invest particularly in content. So look, to your question of whether we can be successful; the answer is definitely yes. We have what it takes to succeed in streaming, and you'll just have to watch us.

Got it. So obviously, today, I think you launched your Ad-Lite product, the essentials for $4.99 a month. Slight discount to where you had it in the legacy CBS All Access. Can you just talk about that product? It seems like it probably will be the most popular product in our minds. What's the ad monetization opportunity there? And how was the success on the CBS All Access side where you had a similar product?

Yes, sure, Vijay. So as you noted, we launched our $4.99, what we call the essential plan of Paramount+ today. And we did that because given what we know about elasticity, we feel this lower price point of $4.99 will [ broaden the ] addressable market for Paramount+. Again, it's all about unlocking a substantial TAM out there, and this is an incremental way for us to do it. But it also offers us another opportunity to serve the rapidly growing premium digital ad market. As you know, at the core of ViacomCBS, we serve advertisers, their agencies, et cetera. And when we look at this product and the dynamics of the ad market, we actually believe, analytically, that the $4.99 version can actually generate higher ARPU over time than our $9.99 product. So we think that's tremendously compelling because it -- again, it broadens the consumer base and it drives higher ARPU. And we've learned an incredible amount about the digital premium ad market through Pluto. And that, in turn, puts us on a path to substantially outperform the historical CBS All Access ad business. I'd also point out that this $4.99 essentials offering is key to distribution. On one hand, it offers lower price point, back to the strategy of serving different customer constituents of the distributors. But importantly, it also gives us more flexibility for promotion, which means we can do different kinds of things than we might want to do with the $9.99 product. And then lastly, from a profitability standpoint, this essentials plan does not include the linear fee. And that, in turn, improves our cost structure. So those cost savings more than offset the $1 reduction. As you know, we have a $5.99 CBS All Access, now Paramount+ product. The $4.99 replaces that, so it's $1 cheaper. But the cost structure change more than offsets that. So we feel really good about the margin structure of this product.

Got it. So on Paramount+, I think you added 6 million customers in the first quarter. Can you broadly talk about consumption trends, engagement, types of customers you're getting. Any -- it's probably still early days, but sort of any churn characteristics? And sort of are you sort of really increasing your TAM of customers relative to your sort of your linear business?

Yes. Well, look, we're leading more into streaming, and it's working for sure. You see us driving subscribers. We see increasing engagement. We are seeing churn come down. And we've seen the average age come down materially. All of those metrics have improved since our Paramount+ launch. You can clearly see that in the metrics that we do highlight, the record 6 million subscribers we added in Q1. Our global streaming revenue, which was already $2.6 billion on a full year basis in 2020, that grew 65% in the first quarter on a year-to-year basis. Now what's behind that? The clear driver is putting the full content power of ViacomCBS behind Paramount+. That mix is definitely delivering. If you go back to our earnings call, for the first quarter, we talked about half the subscriber engagement in March coming from the combination of originals. Paramount in our cable networks content. If you peel that back, the kids content, the reality stuff from MTV and soccer are really working and aging down the service. I'd also note that last week, we launched the latest Nickelodeon exclusive original for Paramount+, and that's Rugrats. And it's only been a bunch of days, but if you actually look at how it's performing relative to the first original we released which was Camp Coral, a SpongeBob spinoff, Rugrats on a relative basis, is actually off to a stronger start. So it clearly highlights that this franchise strategy and exclusive original spinoffs for Paramount+ is working. That said, CBS content is super important to Paramount+, too. That comes from both the network as well as the local TV stations. And that's a place where CBS' long-standing leadership in the crime genre, things like NCIS and Hawaii Five-0, et cetera, is really the driving value for us. So I'm very excited about that. But what really gets me excited about is looking forward. We have an incredible slate coming. Many more originals, including this year. Things like an established like Star Trek:Picard is coming back. But also, we have a new iCarly coming at the end of this month, which is another Nickelodeon original that we're creating exclusively; [ reboring ], if you will, for Paramount+. A lot of social media buzz on that. We have the first Yellowstone spinoff. Yellowstone is an out-and-out hit, both on linear and in streaming. So we're really excited about that, Yellowstone 1883. We got a number of CBS series moving exclusively to Paramount+, things like Evil and SEAL TEAM. And that's the tip of the iceberg. The other thing that's going on is our film ramp up. And films are important to streaming; there's no question about it. And it starts with the debut of Infinite, which is a sci-fi thriller starring Mark Wahlberg that we're dropping exclusively on Paramount+ this Thursday. And on the same day, we're adding another 1,000 high-quality features, both from Paramount and from other major Hollywood studios. So our film offering is about to ratchet up dramatically this week. And then in a little over a month, we'll follow that up with the early window streaming premier of A Quiet Place 2, which as you probably know, we released over Memorial Day weekend, and that became the biggest theatrical hit since COVID. And then in August, we're going to release the Paw Patrol movie. That's the biggest preschool franchise in the world, and we're going to release it day and date on Paramount+ and in theaters. We think in COVID, that makes a lot of sense. So it's a little bit of a different strategy, but it's because of the demographic of the movie. So that's in August. So the momentum we're seeing is going to continue. And once again, we expect streaming revenue growth to accelerate in Q2 relative to what we posted in Q1.

Got it. So you talked about the content slate really ramping up. Can you talk about the distribution side? I think you talked about 25 markets by the end of this year and doubling to -- doubling by the end of 2022. Any details on the cadence of launch in terms of -- I think Australia is the next big market. When is Europe, some of the key markets that could drive growth? Any color on that would be appreciated.

Yes. Sure. So I think when you're saying distribution, you mean international.

International. Yes.

Right. So look, streaming, clearly a global opportunity, and we are going after it. And remember, at ViacomCBS, we know international. I ran our international business for a decade. I've been on the ground in all these markets. More importantly, our company has been operating on the ground outside U.S. for decades. We're not simply a content licensor. We know the markets, we know culture and we know content. And we have teams and assets in the country that know how to unlock value through media. And internationally, it's important to note that streaming really is a great opportunity to enable reach beyond the Pay TV universe and increase our penetration even more so than the U.S. A lot of people on this call, obviously, think about the U.S. market, but the streaming upside in terms of reach internationally is very significant. Now of course, content is key to streaming. And that's a place where we'll increasingly benefit from our content assets outside the U.S. There, we have substantial local language libraries, and we have very significant ex-U.S. original content production. So just to think about that a little bit more for a second, as examples, we have English language production in the U.K., in Australia and in Israel. We have Spanish production in Mexico, in Colombia, in Argentina, in Chile. And we have Portuguese production in Brazil. Now when you look at that list, you'll see that international is a place where we built our business both organically and through tuck-in acquisitions. Most recently exemplified from our deal by our deal to acquire Chilevision, so we're about to have a materially stronger presence in that market. And that's a free-to-air broadcaster, which gives us scale and promotion and the like. But importantly, real content production to flesh out our Spanish language even further. That content, obviously, is going to benefit us in market as we launch it. As you know, we already have Pluto and Paramount+ in Latin America, both Spanish and Portuguese, i.e., Brazil. But that content volume will also benefit us globally, including in the U.S., and you're going to see that ramp as the year goes on. So we have international production, both on the factual side and the scripted side, being added to Paramount+ in the U.S. starting next month, and that will really ramp-up in the fall. So as an example, we're going to add 450 hours on scripted and unscripted series to Paramount+ sourced from the studios I mentioned this fall. And simultaneously, we're ramping up a couple of major unscripted hubs, which will supply localized formats on a really cost-advantaged basis. And there's more to come in that story. So I'll just leave it at that for now, but I'm super excited about what we're doing there. And while I think our metrics show we are already showing great momentum, there's obviously much more to come here, Vijay. You'll see more of that in terms of launch plans, our global content strategy and global partnership plans in the coming months. Remember, we work with people on the ground. We know how to do partnerships as well, and we see some interesting opportunity there. Because big picture, our international assets are a source of differentiation for our company, they're a source of advantage, and they will help power our streaming business globally.

So moving to sort of sports. Obviously, you've signed a new NFL deal. You have pretty established soccer rights. And more recently, Australian soccer rights, I noticed. Can you just talk about how important sort of sports is key to your strategy to drive subscriber growth for Paramount+? And some of these sports rights are sort of regional. Does that limit the leveragability of it for driving sort of your content investment going forward?

Yes. So look, Paramount+, Live sports, breaking news, mountain of entertainment. Starts with Live sports, at least in that tag line. So sports are an important part of our strategy, for sure. And if you look at the product today, we already have a really compelling set of year-round properties. Obviously, each property is not year round, but it helps us expand the year which is critical. That includes the NFL, the SEC on the football side, golf, UEFA, women's soccer on the European football side. Most recently, and as you mentioned, we added some incremental international soccer rights. We, of course, picked up [indiscernible] from Italy. And then we also picked up some leagues in Australia, Brazil and some other international markets. If you put all that together, by the way, we now have over 1,600 matches annually, which will build further momentum for Paramount+ as a first choice for U.S. soccer fans. And look, that's a nice headline, but the more important thing is sports has already been proven as a highly effective driver of subscribers and engagement, initially at CBS All access, now Paramount+. If you look at the NFL, it's a consistent driver. And we can't wait for it to come back in the fall. And then soccer, which, again, we've been building out European football. It's also proving extremely effective. We just had Paramount+ at the UEFA 2021 Champions League Final. It was the most streamed non-NFL sporting event ever for us. So that's working. UEFA, at large, has been a significant acquisition driver for Paramount+ both in April and in May, which is when it was in run, if you will. And it's one of the things that's also lowering our average age. Our average age came down by 6 years, which is a big deal as you think about TAM and going after broader markets. So we like sports. We know we see the effectiveness. We obviously are very focused on acquisition and looking at ROI on a market-specific basis to make sure we believe in the deals we're doing. But again, our experience to date says we do, and we will continue to look for opportunity. And as we look for opportunity, I think one of the important things to note, back to the benefit of a kind of a multi-platform business, the combination of being able to offer a league both some linear exposure and volume in streaming, is really appealing to them. That definitely worked in our UEFA deal, where the vast majority of the matches are exclusive to streaming, but we do, do select matches on linear. So that package is valuable to the leagues, and it's part of getting deals done. So yes, we look at sports as a key component of Paramount+. We see real value creation here, and we will, as I said, continue to look for additional opportunity.

So moving to AVOD and your Pluto service that, I think you mentioned, has cost passed 50 million MAUs. And has doubled revenues, I think, for the last 3 quarters in a row, which is pretty impressive. But I think you mentioned viewership hours were up 28% on a year-over-year basis. Does that mean growing CPMs is the bigger lever right now on Pluto? And any color on what the CPMs are versus sort of linear? And internationally, while EMEA growth looks healthy, is monetization similar or limited by sort of more nascent digital advertising markets? So a lot of questions in that. But...

Yes, you got a lot packed in there, Vijay. So let's start top down. So FAST, which is free ad-supported streaming television, which is the category Pluto is in, it's a large and high-growth category. You look at some of the projections out there. People think the global AVOD market is going to be over $50 billion in the next 4 years. You look at Pluto TV, it is the U.S. market leader, and it's also undergoing rapid international expansion, making us a global leader as well. You look at the U.S., based on all the data we see, we lead on the MAU side, we lead on the viewership side and we lead on the revenue side. And speaking of revenue, Pluto TV is really showing exceptional monetization momentum. I've seen a lot of media businesses over the year. This thing is incredible, and it really is a growth engine for ViacomCBS. Revenue more than doubled year-over-year in the most recent quarter. And that was the third quarter in a row it did that. And so you step back and you go, why is Pluto TV kind of on fire? And the reason is it's got a powerful multidimensional growth model. I like to think of that model as 2 parts consumer, which is MAUs and engagement. That's really the impression fuel of the thing. So MAUs, obviously, continuing to grow rapidly, almost 50 million, just short of 50 million in Q1. And we see substantial room to run on the MAU side, particularly outside the U.S. And then there's engagement. You referenced an engagement stat in your question, time spent per user, that also continues to go up. And that's really, as users gain familiarity with the product, it becomes a routine in their life, and they see the volume of high-quality content on the platform. Again, over 150,000 hours of content in U.S. It's incredible. If you guys haven't checked it out, you really should. And then to go with the 2 parts on the consumer side, you've got 2 parts of ad monetization, which includes sellout and price CPMs. So on the sellout side, the reality is we have substantial availability because we've had so much growth in the first 2 parts, MAU and engagement, that we really haven't had to lean on the sellout side yet. So there's upside there from a monetization standpoint. And then there's price, where we're in a fantastic position. Why? Because you got very strong demand for premium quality, particularly in connected TV inventory, which is the wheelhouse of Pluto. And our position in the market today, if you look at us relative to the competition, we are one of the most efficiently priced premium video products on the marketplace. And that's actually a very good thing because it means we've got a lot of room to run in the CPM side going forward when we choose to pull that lever. So to be clear, we have these 4 growth levers for Pluto, each one of them has upside, room to run, but they're multiplicative when they work together. And that's why, for the third quarter in a row, we doubled ad revenue. But if you really want to think of something amazing, think of this. When we acquired Pluto TV as Viacom legacy in early 2019, the business had just delivered roughly $70 million in full year 2018 ad revenue. At the time, we, management, said it would be $1 billion business in the not-too-distant future. And Vijay, I think it's fair. I was on CNBC and talking to you, everyone thought we were nuts. Guess what? On a run rate basis, in Q4 of 2021 this year, Pluto TV will cross the $1 billion level. And we expect it to be comfortably above $1 billion for full year 2022. That is the power of Pluto TV and these 4 growth levers. And just to finish, it's worth noting that from a monetization business, Pluto TV is essentially still a U.S. business. But that international opportunity that's ahead of us is massive. We're now in 25 markets with more coming this year. We expect the international markets to follow a similar path that we experienced in the U.S. So you start with MAU growth, then you get engagement. That builds that 2 parts of consumer, and then you go to monetization through sellout and price. So we see where this thing is going. We've seen where it's gone in the U.S., and it's got a ways to go, and we see where it's going internationally. I couldn't be more excited about Pluto. I don't think we get enough credit, quite frankly, for it. But the road ahead is just tremendously compelling for this product.

Got it. So you mentioned on your 1Q call that the vast majority of the net adds on Paramount+ for domestic, it'd be really helpful to hear your view on the appetite for consumers to have both sort of a linear product from the Viacom set of channels as well as Paramount+. And I'm really trying to get to -- if there is cannibalization from a company standpoint, you, I think, are generating about mid-teens revenue per subscriber per month in your linear channels. I think your DTC products are sub-$10 at this point. How is this sort of accretive for Viacom as an enterprise?

Yes. So look, our strategy is to serve consumers where they are, to maximize this TAM. And that means accessing this high-growth streaming market, while simultaneously continuing to benefit economically from our established businesses, an established legacy markets, if you will, including using those legacy markets to fund content production to further drive stream. So to your question on cannibalization, ARPU and the like, if you start by looking outside the U.S., the per se economics for streaming are definitely accretive relative to linear. And in fact, if you peel it back and look market by market, there's markets where the streaming ARPUs are multiple of corresponding linear ARPU. And that's because the sort of affiliate revenue per sub in general, in international is low; in some cases, significantly low relative to the U.S. And then there's the other point I made before, which is the pay TV universe is, in general, more limited outside the U.S., which means you not only have ARPU upside, but you can serve a significantly larger base of viewers. So that's important. Now you come into the U.S. and you look at the same thing. And it's true that streaming subscription ARPUs, as you mentioned in your question, are currently below linear ARPUs. But it's not the whole story, particularly for ViacomCBS. Because consumers do not reside exclusively in pay or ad supported. They overwhelmingly use both. And that's an important fact for our company. And when you take into fact that, which is we got them on Pluto and we got them on Paramount+, the ARPU gap matters -- narrows dramatically. And if you look at the trajectory of domestic streaming pay ARPU, both from a subscription and from an advertising side, you'll see, we believe, that number will further improve over time. On the subscription side, highly likely that price moves up. Our ARPU for our domestic paid Paramount+ subscriber's already close to $9. And if you look at trends on pricing from the more established players, there's clearly a pattern of price increases as content selection expands. I'm not saying we're raising the price of Paramount+ tomorrow, but over time, there's definitely pricing upside. Then on the advertising side, again, going back to the Pluto model, which also applies to Paramount+, we got upside engagement and monetization, and we're going to continue to evolve ad formats and targeting to really optimize that equation. And that means if you put it all together, that we will see continued improvement in ARPU over time, and we believe it can match and eventually exceed, including in the U.S., later ARPU. And by the way, it is worth noting, and it was part of your question, too, that for us to date, roughly 2/3 of our Paramount+ subscribers also subscribe to pay TV. And that number's been holding pretty constant. So that's not to say that we're not extending reach outside of pay TV. We definitely are. But there is plenty of evidence to say this isn't totally cannibalistic that there is an incremental side here as well. So we like what we're seeing at the moment from the ARPU side. We see clear evidence of path towards up where, both internationally and domestically. And that's one of the things that makes us exciting about this business as we're currently focused on building the consumer base.

Got it. So obviously, with this transformation happening across the linear to the streaming side, one thing that we obviously are rafting with is what the profitability is of streaming. And so in that context, I think your legacy channels business has about 30% margins. I know you haven't given long-term margins guidance, but how do you sort of think about streaming as a business? Is it a good business? You have some pretty sizable companies out there that have multiple -- hundreds of millions of subscribers that don't generate free cash flow yet. So in that context, can you just talk about where you see that inflection to profitability for the -- from that investment pool that you're putting in right now to drive streaming right now?

Yes. Look, the answer is pretty simple, which is streaming is still an early stage media business in general and certainly for ViacomCBS. And in an early stage business, you focus on usage, then revenue. And over time, you focus on profitability and cash flow. So for us today, we're focused on usage and revenue growth and really building scale there. And then it's not to say we don't look at ROIs of content like we do. But right now, we're building the base. And over time, as we build that base, particularly on a global basis, we see streaming becoming a meaningful contributor to the bottom line. But again, it's where you are in the cycle here, and we're early in the cycle.

Got it. So moving to your legacy businesses a little. Obviously, a question that comes up now is as you spend all this capital and drive your DTC business, how does it affect your relationship with your legacy distributors in cable and satellite and telecom providers? Given [indiscernible] clauses there, how do you navigate pricing, price value negotiations that might come about, given you have a competitive alternative out there. Anything you can sort of talk about. I know you guys have been pretty unique and creative in some of your past dealings with adding incremental value to distributors. Do you sort of see sort of an acceleration of challenges here given your DTC pivot?

Well, look, if you look at the MVPD ecosystem, we're really a cornerstone content provider. And we do supply MVPDs and VMVPDs, for that matter, as part of that with unique first window content, including must-have exclusives and sports. All of our cable brands have exclusive originals in linear, and that includes events, things like the CMT Awards, which are coming this Wednesday, and that supports the value proposition. If you look at the value proposition, the fact is that we have delivered a strong track record, full year '20, year-to-date '21 with that. As you know, we closed multiple deals, including with Comcast, Verizon, with YouTube, with Hulu. None of these are walk-in-the-park companies. They all have real scale, but we're doing business with all of them. Which when you combine these new deals with the contractual rate increases of in-flight deals, you've seen nice affiliate growth and you've seen incremental distribution. And we said on our Q1 call, we expect to see a modest acceleration in the year-on-year growth in affiliate for Q2 relative to Q1. So we like that. As you said, there are other parts in the equation where we have the ability to create value. That's notably a big ad sales, where we were an early mover in that space. That provides incremental value both to our distribution clients and to ViacomCBS. And more recently, now we're in the streaming app business together. And again, back to an earlier comment, we supply both free product and pay product. We supply it for set-top box and for broadband only, things like Comcast Flex, Xfinity Flex. And again, it's not conceptual. In addition to Comcast, we did the same thing with Verizon. So it is a powerful economic partnership. And as I look going forward, I continue to really like our position, and that's how we're getting business done.

Got it. Bob, I think we're running out of time, but I'm going to try and sneak in one last one, if I can. Obviously, the advertising upfront process is something going on. How would you characterize the demand and pricing, obviously, coming out of a COVID year? What's changed, if anything? Anything structural? Just sort of a broad outlook on what you're sort of seeing on the advertising side.

Yes. Look, so real quick, we've seen our ad growth improve in each of the last 3 quarters. We expect another quarter of strong double-digit ad growth in Q2. Why? Because demand continues to improve and scatter pricing is really at like all-time highs. And we used to say that, but it really is. There's mostly sale pricing out there, and that is evidence of the demand for high-quality linear. As I look to the upfront, and it's early in the upfront right now, but on upfront, it's going to be off the hook. If you look at the scatter market going in, it is ideal for an upfront because of all the demand and pricing we're seeing. And in addition to the general market, we are seeing the benefit of truly going to market as a combined company. And that creates real advantage for us. Because we have scale and reach both in high-quality, brand-safe, digital environments and in the linear side. And in addition to that or another dimension of that, we have these must have offerings. The NFL, primetime, Late Night, tent-poles, diverse audiences. So the ad market is looking very good to us. Our company is really connecting with it. Our IQ product is a big part of our strategy, and that combines all our high-quality digital. We're seeing tremendous growth there. And we'll be selling the $4.99 Paramount+ product there. So I'm feeling great about the ad business. I'm feeling great about the prospects for the upfront. I look forward to talking about it on the second quarter call when we'll be in a place where my guess is all the business is done.

Got it. I think we'll leave it at that. Thank you, Bob, for taking the time this morning. Appreciate it.

Thanks, Vijay. Great spending time with you. I look forward to doing it again in person, hopefully, in the not-too-distant future.

Thanks so much.