Good day, everyone, and welcome to the ViacomCBS Conference Call. Today’s call is being recorded. At this time, I’d like to turn the call over to Executive Vice President of Investor Relations, Mr. Anthony DiClemente. Please go ahead, sir.

Good morning, everyone. Thank you for taking the time to join us for our third quarter 2021 earnings call. Joining us for today’s discussion are Bob Bakish, our President and CEO and Naveen Chopra, our CFO. Please note that in addition to our earnings release, we have trending schedules containing supplemental information available on our website. We want to remind you that certain statements made on this call are forward-looking statements that involve risks and uncertainties. These risks and uncertainties are discussed in more detail in our filings with the SEC. Some of today’s financial remarks will focus on adjusted results. Reconciliations of these non-GAAP financial measures can be found in our earnings release or in our trending schedules, which contain supplemental information and in each case, can be found in the Investor Relations section of our website. Now, I will turn the call over to Bob.

Good morning, and thank you for joining us. On today’s call, I will cover two key topics. First, I will briefly discuss ViacomCBS’s third quarter results. Then I will talk about streaming, where we are executing against a global strategy that leans into our distinct competitive advantages and where our strong momentum shows how we are uniquely positioned for success. Let me start with the company’s third quarter results, where we achieved another quarter of strong performance as total company revenue grew 13% year-over-year, reflecting growth across all revenue streams. In affiliate, revenue grew as we continued to benefit from the expanded distribution of ViacomCBS’s renowned brands. We also struck a series of distribution renewals, including with Charter, Cox and just last month, Altice. And despite a tough comparison against political advertising in the prior year quarter, we grew advertising revenue in Q3, benefiting from an improved marketplace. Turning to streaming, we had another fantastic quarter of growth. The strength and momentum of both Paramount+ and Pluto TV are clearly evident and demonstrate the power of the strategy we laid out at our investor event earlier this year. Overall, quarterly global streaming revenue surpassed $1 billion for the first time, driven by robust growth in both subscription and advertising, including the addition of 4.3 million global streaming subscribers. These strong streaming results reinforce our conviction that our strategy is working and that we are well positioned to capture the significant opportunity in the global streaming ecosystem. To that end, I want to remind you of three key enablers driving the ViacomCBS strategy, all of which we are seeing in action: first, an incredible breadth and depth of compelling content, which is critical to attracting and retaining consumers globally; second, robust distribution and marketing, which ensures we can build the broadest…

Thank you, Bob and good morning everyone. Our third quarter results were highlighted by continued growth in streaming, where we had another solid quarter of subscriber additions. Streaming revenue grew 62% year-over-year with solid growth in both the subscription and advertising components of our streaming business. Q3 also benefited from growth in traditional advertising, affiliate revenue and content licensing. Let me start by providing some additional granularity on our streaming results, beginning with our subscription business and then moving to our ad-supported services. We added 4.3 million global streaming subscribers in the quarter, reaching nearly 47 million at quarter end. Paramount+ continues to drive the significant majority of new subscribers with a mix of both domestic and international customers. We also saw continued improvement in Paramount+ engagement. The average monthly share of domestic pay subscribers active on the service also known as our monthly active rate, grew in the quarter both sequentially and year-over-year. At the same time, average monthly hours per active domestic subscriber also improved quarter-over-quarter and year-over-year. And in terms of monetization, global streaming subscription ARPU increased 8% year-over-year. The combination of strong subscriber growth and increased engagement led to streaming subscription revenue growth of 79% to $548 million. Moving to our ad-supported streaming businesses, Pluto TV ended Q3 with 54.4 billion global MAUs and revenue grew 99% year-over-year. Pluto’s success continues to be driven by growth in users, engagement and sell-through, which translated to a 60% increase in Pluto TV domestic ARPU in the quarter. While Pluto accounts for the majority of our streaming advertising revenue growth, we also saw strong growth at Paramount+, where domestic advertising revenue more than doubled in the quarter. All-in, streaming advertising revenue grew 48% year-over-year to $531 million. Advertising revenue, which excludes streaming, grew 1% in Q3 to $1.9 billion…

Thank you. At this time, we’ll be conducting a question-and-answer session. [Operator Instructions] Our first question comes from the line of Brett Feldman with Goldman Sachs. Please proceed with your question.

Yes. Thanks for taking the question. It’s actually a three-part question about the new T-Mobile deal, which looks pretty exciting. T-Mobile, they just reported earlier in the week, they had just under 27 million postpaid accounts, I just want to confirm that, that’s sort of the addressable opportunity for you with T-Mobile. And then I’m curious why you’re expecting the impact to be more early next year, even though it’s going to start being offered in this quarter? The second part of the question is, typically, these are wholesale deals, where all of these customers would be paid and in your paid subscriber count, but maybe at a lower ARPU. And I’m just curious if that’s the arrangement here. And then the last one is a bigger one. This is now sort of your second big distribution deal following what you’ve done with Sky in Europe. I was hoping you can maybe give us some insights into what you think the opportunity is to continue adding more distribution partners, both domestically and in your international markets? Thanks.

Yes. Sure, Brett. Let me start and actually start in reverse order. So look, I believe in the power of partnership. It has been used effectively to create value – create value for this company in the past and will on a going-forward basis. Today, we talked about two partnerships: T-Mobile and Sky. I think they are great examples of creating value. And in all cases, when we think about partnership, what we’re looking for is an ability to drive scale. We’re looking for low subscriber acquisition costs. We’re looking for deals which will drive subscriber stickiness. And we want to align with great brands. And again, those are examples of both. So let’s talk about T-Mobile a little bit since that was at the core of your question. We’re thrilled with the deal we announced this morning. It’s an efficient way for us to acquire Paramount+ subscribers. It’s a partnership with a great consumer brand, and it will be additive to Paramount+’s momentum. When I think about it, I’d highlight two things, big picture. The first one is that the most important thing for Paramount+ now is exposing more consumers to the offering, particularly as we’re ramping content. So this deal obviously does that. And unlike most wireless promotions, this deal will be available to all T-Mo users. The second thing I’d highlight is that the fit of Paramount+ and T-Mobile is excellent. Their un-carrier position speaks really to value and innovation that aligns with Paramount+. And the essentials product that we’re using is ideal. As you know, that product has content for the whole household. And it has an attractive price point of $4.99, which will really maximize downstream conversion after the promotional period, and the broader distribution of Paramount+ Essential fits well with driving our streaming ad business. So we think that all makes tremendous sense. And again, we’re very happy with this deal. Naveen, maybe you comment a bit more on the economics.

Sure. Bob, happy to do that. We’re definitely looking forward to showcasing all the new content we’ve got coming to Paramount+ in 2022 for all T-Mobile customers. So to your question about scope, yes, it – we’re excited to make this available to all the postpaid T-Mobile customers. We do think that the deal should accelerate sub growth for Paramount+, but it will build over time. Some of the reason behind that is that the really big broad awareness marketing campaign will mostly kick in, in 2022. And between now and then, we’re going to be doing some things to evolve and optimize the consumer sign-up experience. We like the economics of these deals. You asked about the impact on ARPU as is typically the case for these kinds of third-party bundles, they do come with slightly lower ARPU than what we would see on a direct basis. But we really like the LTVs of the subs that we can acquire through these types of deals. Those subs have lower churn and we get full access to all the relevant user data, which helps us further maximize lifetime value. And at the same time, SAC is very low. So that ratio between lifetime value and acquisition cost is really compelling. And given what we’re seeing with our trial-to-pay conversion rates, I think, we can really make some hay out of giving T-Mobile customers 12 months to experience all the great content that we are producing for Paramount+ and then having them roll to paid customers after that point in time.

Thanks, Brett. Operator, we will take our next question, please.

Thank you. Our next question comes from the line of Michael Morris with Guggenheim Partners. Please proceed with your question.

Thank you. Good morning, guys. I’ll ask a couple quickly. First, kind of following up on the T-Mobile question, I’d ask the same thing about the Sky partnership for Paramount+, whether at this point, we have any more insight into the timing of the Western European launch there and how to think about sort of the immediate impact of the partnership or what the sort of steps are to kind of penetrate the addressable market there, what the timing might be? And then second, if I could just ask maybe Naveen a little bit more on the composition of the $47 million global streaming subs. Could you help us at all at this point with how many of those are Paramount+ and maybe within Paramount+ the mix of premium versus essentials as you look at the new sort of reporting that you just announced, is that something that maybe we work towards getting regular disclosure going forward? Thank you.

Yes, sure, Mike. So let me start and then I’ll throw it to Naveen. On the Sky question, there is really two different kinds of partnerships with Sky that we’ve announced. The first one, you could think of as a bundle, and that’s with Sky in the UK, in Germany and Italy. It’s a commercial deal where Sky will distribute Paramount+ to all their Sky Cinema subscribers. And we look at that as a compelling way to accelerate penetration, but it’s a commercial deal. So we preserve a 100% ownership of the business. Like Naveen talked about with T-Mo, we believe that has really attractive SAC and churn characteristics. And importantly, in that deal, we’ve preserved our right to go direct in those markets as well to pursue additional opportunity because obviously, O&O direct is an important part of the streaming business. The second deal we announced with Sky is the Sky Showtime joint venture, that’s really a deal with Comcast, obviously, as well. That’s 50-50 JV on an equity basis. That’s targeting 20 smaller, mostly Eastern European countries, which is additive to the 45 markets we’ve talked about for ‘22 historically. We see that – and that will be a single app combining ViacomCBS and Comcast product. And we look at that as a way for us to participate in these smaller markets while preserving investment capacity for the larger ones, which are more important strategically. Now in terms of timing of both of those, the Sky bundle will launch in the UK in the first half of ‘22, and that will be followed by Germany, Austria and Italy also in ‘22. Sky Showtime, we’ve yet to announce dates on that, but it will be in ‘22. So that’s the story big picture. Naveen?

Yes. So to your questions about composition of the streaming subscriber base, first, actually, I think, the last part of your question, we will be aiming to provide some incremental disclosure related to the breakdown of streaming subs as part of the changes in reporting for Q1 and beyond. So stay tuned for that. In terms of where we stand today, I can give you a little bit of color around some of what we’ve seen in terms of sub additions. I think I mentioned that a significant majority of additions in the quarter came from Paramount+. I’d also note that Paramount+ domestic ads were higher in Q3 than they were in Q2. So even though that’s the case, we do still have a nice contribution from international. And in terms of the split between Premium and Essentials, we don’t break that out specifically, but they are both important contributors to the subs that we added in the quarter.

Thanks a lot. Operator, we will take our next question.

Thank you. Our next question comes from the line of Alexia Quadrani with JPMorgan. Please, proceed with your question.

Hi, thank you. It sounds like movies are some of the biggest drivers to new subscribers based on your opening comments, Bob. I’m wondering if that changes the way that you think about windowing are you less inclined to stay with a 45-day window. And my second question is just back to the investment in local language content you’ve made several acquisitions to bolster that content. Going forward, I think you see outsized investment in content outside the U.S. versus domestic or is it kind of – how should we think about it should be kind of even? Which markets do you see as sort of more competitive and maybe need more spending?

Yes, sure, Alexia. On the film windowing question, if you look at Paramount+ in the quarter, the third quarter, we actually deployed three different models. We deployed exclusive premiere. We deployed day in date. We deployed 45-day fast follow. And actually, we deployed the exclusive both in what was planned for a theatrical release and in a true made for. So we’re experimenting with a bunch of different models on the Paramount+ side based on what we think is best for a specific film, obviously, keeping in mind all the constituents involved in that. The reality is we see them all work. So it’s not a question of moving away from one or the other. We’re going to continue to optimize on a per film basis, and we’re definitely not moving off the 45-day fast follow. If you look at A Quiet Place Part 2, that was a film that used that model, and it was very effective both in theatrical from a box office perspective, even with some of the COVID issues as well as a big sub-driver for Paramount+. And by the way, we’ve got plenty of consumption of a A Quiet Place Part 1 as well, which really points to the value of having a library to go along with, call it, new release product on Paramount+. So we will continue that. As I said in my remarks, the next film up this weekend is Clifford. That will be another day in date theatrical Paramount+ release. We think kids and family in this continued COVID time. Those films are ripe for day and date. Again, PAW Patrol worked very well, and we’re excited about Clifford. Moving to the second part of your question, which is around local content people think of ViacomCBS as a massive English language…

Thanks, Alexia. Operator, next question.

Thank you. Our next question comes from the line of Rich Greenfield with LightShed Partners. Please, proceed with your question.

Hi, thanks for taking the question. Over the last several months, WarnerMedia moved away from Amazon channel. So you’ve seen essentially the biggest players in streaming: Disney, Netflix, Hulu, Apple TV, all sort of focus on D2C and a direct retail relationship with the consumer versus wholesaling through Amazon. I think if I look at ViacomCBS, I think you’re the largest now of the remaining players on Amazon channels, who are using Amazon channels. Bob, I’d love sort of your sort of high level kind of view on the puts and takes of being on Amazon versus going and being in sort of a wholesale relationship with the consumer versus fully direct? And should we think about as you start to focus more and more on streaming, will you move away from Amazon and go fully direct or is this something you like and you think others are actually incorrect in not being on Amazon – And it would be great to – if there is any way to frame how big Amazon is or things like Amazon are part of that $47 million, that would be great to understand as well? Thanks.

Yes. Sure, Rich. Look, it’s a great question. We continue to believe in broad and ubiquitous distribution really has a path to scale. And that includes wholesale relationships, including with the company you mentioned. Now look, there is obviously trade-offs in terms of a wholesale versus a direct relationship. Those trade-offs tend to be around requests for certain types of exclusivity, data access, margin. So it’s not a black-and-white question. The real question is, do you have deals in place, which makes sense relative to those considerations. And we gave a lot of thought to that. And by the way, that means we passed on some deals and some deals take longer to get done than certain people would like because the deal has to be right. But net-net, where we are in terms of balance, particularly as we’re focused on scaling, we continue to believe in the benefit of these wholesale relationships in terms really of providing access to the largest total addressable market, which we strongly believe offsets some of the other considerations, again, assuming you have the appropriate deal structure. So we like the balanced model. Of course, it’s something we’re going to continue to evaluate over time as we scale. But we see value to these distribution channels today.

Thanks, Rich. Next question, please.

Thank you. Our next question comes from the line of John Hodulik with UBS. Please, proceed with your question.

Great. Thanks, guys. Two things. First on the DTC content, Naveen, thanks for the color there, ramping to sounds like over $2 billion in ‘21. Is the $5 billion in ‘24 still the target? Any color on sort of how that ramps in ‘22? And how much of that is incremental to the whole company? And then secondly, the licensing revenues look strong again this quarter, and I know you guys benefited from easier comps. But Bob, you’re talking about the business continuing to be a multi-revenue stream business. Just your view on sort of the future of that licensing business you have and how that fits into the broader D2C strategy? Thanks.

Yes, sure. John, I’ll jump in there first on the content spend. The $5 billion, as you said, is our sort of where we’re tracking on a long-term basis. I think I would remind you that that is not entirely incremental to total company content spend. And so while we are expecting to see material increases in streaming content expense, I mentioned the doubling from 2020 to 2021 and then growing further to over $5 billion by 2024, not all of that is entirely incremental because as the linear business continues to evolve, there will be remixing between linear and streaming. I think you’ve heard me say before that there is a lot of content that does double duty for us on both linear and streaming platforms. And I think at the end of the day, we are very focused on the ROI of those content investments. We continue to see content investment as the single greatest way to continue to grow customer LTVs both through increased engagement and lower churn. And we’re already seeing evidence of that in our results since the launch of Paramount+. So it makes total sense for us to continue to invest behind it. And then I think the second question is on content licensing?

Yes. Look, I will take the licensing side. We have obviously been in the licensing business for a long time. As a reminder, content licensing revenue for ViacomCBS has a bunch of different components in it. As Naveen mentioned in his remarks, it includes home entertainment, includes TV syndication, it includes consumer products, and of course, it includes licensing of content more broadly. When you look at – so I would say two things. One is we are in the licensing business, but two is that business is, for sure, evolving. So, when you look at the Q3 results, and yes, there was a whole bunch of growth there. The growth was heavily COVID related. We had many deliveries that were delayed due to production shutdowns. So, there is definitely some catch-up in Q3. And then the other thing that’s going on is, if you looked at the prior year quarter, particularly internationally, particularly in the ad-supported network space, you had many people that had hunkered – many buyers that had hunkered down and we are preserving cash given the uncertainty of the revenue situation. As the ad market has rebounded, those companies have moved to refresh their content lineups so that they can satisfy their consumers with new product versus kind of running these brackets off what they had at the time. And that’s certainly a driver of the growth. The third thing is there are a bunch of original series deliveries in there. What you need to understand about that is those are fulfillment of deals that were really predating the launch of Paramount+. So, that might be a third season of a show we are doing for someone. It might be a first season of a show we are doing for someone that took 2-plus years to create. So, while our strategy has shifted to become much more focused on owned and operated streaming with our franchises, etcetera. There is a tail to the, call it, legacy deals we have done, and you do see that showing up in the third quarter.

Thanks John. Operator, next question please.

Our next question comes from the line of Jessica Reif Ehrlich with Bank of America Securities. Please proceed with your question.

Thanks. A content question, like could you talk about your evolving strategy for Paramount in context of the whole company growth, so both film and direct-to-consumer? And then, I guess two short follow-ups. For the – for Paramount+, what – can you give us color on your ad lite ARPU? So, what’s the ARPU with advertising versus subscription only? And then you talked a little bit about asset sales, but in Simon & Schuster, given the government’s response, where do you go from here?

Yes. So, a bunch of stuff in there, Jessica, let me start. On content and Paramount, presumably Paramount Pictures, we obviously made a management change there. I m very excited to have Brian in the chair, Jim obviously got us to a better place financially and really stabilized the studio. But as we look at the next chapter, we need to lean in more into franchises. We need to lean more into a multifaceted model, including, of course, streaming. And I think Brian, as both a content creator and a collaborator is ideally suited to that and is already moving quickly to prove that value. In terms of the evolution of the slate, Brian is working on that. I think the good news is we have a very well stock slate as we enter 2022, for sure, great pictures in the can, which hopefully the theatrical market will continue to improve. It has been improving, particularly at the younger end. And that slate will provide tremendous benefit theatrically. And we remain committed to theatrical, but also in downstream windows, including the fast follow strategy we are using for Paramount+ Pay1. You did see us announce a PAW Patrol sequel which speaks to franchises. But I am very excited about where Paramount Pictures is going to go. It clearly is an important part of the company as a content engine. And it’s clearly in early days, but clearly benefiting Paramount+ as well. Let me take the last part of your question, too, which is the Simon & Schuster one, and then I will throw it to Naveen. On Simon & Schuster, really, I just want to reiterate the statements that we and Penguin Random House made earlier in the week. We do believe the transaction will be beneficial for consumers, booksellers and authors. We think the DOJ’s claims are without merit. I am not going to get into any legal arguments here. But I will say, as we have disclosed, under our sale agreement, Penguin Random House has agreed to take all necessary steps to attain the required regulatory approval, including defending through – defending any litigation. And so they and we will vigorously defend this lawsuit. Naveen?

Yes. So, to the question on ARPU is between the essential and premium tiers for Paramount+. A couple of important points. Number one, the ARPUs between those tiers are really not as different as you might think because of the advertising contribution in the essential tier. I think you have heard us comment about the fact that we see a lot of momentum in the digital advertising component, which is one of the things we really like about that plan. And in fact, in Q3, the delta between ARPU on the essential tier and the premium tier continued to narrow. And second major point is that ultimately, we are focused on making sure that our customers are in whichever tier is going to make them the most sticky, meaning we are less focused on the ARPU because in the long run, the bigger determinant of lifetime value is actually the expected life of the customer. So, it’s all about getting them in the tier where they are going to stick around the longest.

Great. Thanks Jessica. Operator, next question.

Thank you. Our next question comes from the line of Ben Swinburne with Morgan Stanley. Please proceed with your question.

Good morning. Bob, you talked a lot about different content verticals for streaming. I wanted to ask you about sports. How is the NFL and sort of your sports line outperforming? Are you looking to add sports rights? And are there international strategies around adding sports to your streaming portfolio over time? And then I will just ask my follow-up now to Naveen. On the new segments next year. I realize it’s a ways out. But I am assuming that includes EBITDA, so we are going to be getting the direct-to-consumer segment EBITDA number. And to your point earlier about content traveling I guess you will be using some sort of allocation between segments on programming that lives in both places. Just was wondering if you could give us some more color there. So, it’s obviously an interesting addition to the sort of disclosures. Thank you.

Yes, sure. So look, I think the best way to think about the sports question is to talk about how Paramount+ consumption has evolved since the transformation. So, we obviously transformed it from CBS All Access nine months ago. And in doing so, made two really big moves, which is adding kids and family content and films, really, at scale. And that has dramatically changed the composition of subscriber acquisitions as well as engagement. Those categories were essentially zero in the CBS All Access days, and now they are very material. And they stand alongside, really, CBS, both entertainment and sports. So, as you talk about sports, there is no question it continues to be a really important category for us. In my remarks, I mentioned the power of the NFL and UEFA, by the way, pro-college football in there. Two, they have continued to perform for us. In fact, both the NFL and UEFA set in-house streaming records when they returned for Paramount+. So, super happy with that. Again, part of – versus being focused on deepening that collection of sports, what we are focusing on is getting really an ROI from that sports and taking advantage of what I would call a conjoint analysis of what else does sports consumers watch. And by the way, the answer to that question tends to be, believe it or not, reality, adult animation and of course, scripted shows. So, we are working on ensuring customer satisfaction of those sports fans and roughly a third of people on Paramount+ have watched sports to go and make sure we are extending that lifetime value. So, that’s our principal focus today, certainly, in the U.S. Ex-U.S., we don’t really have a significant sports component. We have some trials underway like in Australia with Australia – Australian football, but we don’t really start with a cornerstone right. So, we are evaluating where to go with that. Naveen?

Yes. Ben, to your question on what to expect in terms of the new segment reporting, let me share a couple of thoughts. We are obviously making those changes because we are really evolving the way that we are managing the business, and we are increasingly thinking about it as the three parts that we outlined, that traditional media business that combines broadcast and cable networks, which is sort of a lower growth, but a very healthy margin business. The movie studio, which as you know is a core source of content for both our theatrical and streaming platforms. And then that D2C segment, which is the portfolio of a bunch of high-growth businesses where we are still in investment mode, but very bullish about the future growth potential. So yes, we will have those as fully independent segments, meaning the presentation will allow you to see the earnings power of our traditional businesses independent from the investment and contribution from streaming. And I think that will reveal a couple of important things. Number one, it will give you a holistic view of the direct-to-consumer business all the way through the P&L, to your question. And I think it will also demonstrate that earnings in our core business are relatively stable and materially higher than our consolidated OIBDA. So, I think it will be helpful to investors to look at the business in that way and get a much more accurate picture of how the different parts are evolving.

Thanks Ben. Operator, next question.

Thank you. Our next question comes from the line of Doug Mitchelson with Credit Suisse. Please proceed with your question.

Thanks so much. I guess my question, my follow-up. Is the funnel from Pluto to Paramount+ sort of working as you hoped? And is there more to go there? And I think it’s part of that, you made the Paramount+ Showtime bundle permanent recently after sort of a trial period. Any early results from that and any long-term path to just merging those services? And my follow-up for Naveen is, could you give us a sense this year that over $2 billion for content spending, that’s amortization, right? Can you give us a sense of the cash versus book difference for streaming content spend and how we should think about that going forward? Understanding that there might be linear content spending coming down, I would appreciate it. Thanks.

Yes, Doug. So look, we have a differentiated strategy and one we believe is right for our company and right for the times. And that strategy spans both free and pay, which gives us access to the largest total addressable market opportunity. As you know, there is many types of consumers out there. Some people don’t want to pay on one extreme. And on the other extreme, there are heavy users that are fine with paying very significant, call it, monthly bills for entertainment content. Both of those segments or all the segments are a very material size. And the products we have in the space, in this case, Paramount+ on one hand and Pluto on the other, and I will come to Showtime, are differentiated in their space because they are both broad products. We definitely believe there are synergies across this. As you noted, Pluto as a free top-of-the-funnel service using our Paramount+ PIC channel, as an example, which showcases Paramount+ shows, likewise, exhibiting Showtime originals, first episodes, etcetera, both are good for subscriber acquisition. And then in the context of Paramount+ and Showtime in the U.S., those are two services with very, very low overlap in sub base. And so we believe a bundled strategy to the consumer could create some value. And as you know, we launched that product. There are other synergies in this business, too, particularly on the ad side. When you look across Pluto and Paramount+, and you heard Naveen talk about the growth rates of both of those ad businesses, obviously, those ad businesses need to be fueled by impression growth, and both of those businesses are growing impression. So, we like that combination. We believe there is early evidence of synergy across that combination, and we will continue to push that. In terms of Showtime and Paramount+ combined, as you know, we are doing that outside the United States. We think that will be really interesting to get some kind of real data on. But at the same time, they have very distinct brand positionings in the United States. Both are doing well, including Showtime OTT, that’s really offsetting pressures in the linear business. And again, it has a very distinct positioning has a great content slate whether it’s shows like Billions or the L Word or The Chi, new hits like Your Honor. Dexter, I was at the Red Carpet premiere earlier in the week and the return of that. So, Showtime continues to do very well, and we like this multifaceted configuration.

And real briefly on – to your question on the content expense, yes, the $2 billion is expense, not cash. We have not provided any specific color in terms of the long-term cash profile there. I can’t tell you that in terms of Q4. I spoke in my prepared remarks about the trend on that expense between Q3 and Q4. And I would note that from a cash perspective, the increase in Q4 will probably be more modest than what we are seeing from an expense perspective.

Thanks so much Doug. Operator, we have time for one final question.

Thank you. Our final question this morning comes from the line of Robert Fishman with MoffettNathanson. Please proceed with your question.

Thank you and good morning. Yes, just one on the supply chain. So, any impact that you can help share on auto or any other verticals on your portfolio, broadcast, cable networks, the local stations and even Pluto? And then more broadly, if you can discuss how the fourth quarter ad market is looking and any early cancellations you have seen for next quarter? Thank you.

Yes, sure. Happy to talk about it. Let me start by saying we were super happy with Q3 in our ad business. We delivered growth in our advertising line, which as a reminder, excludes streaming ad revenue. And really strong growth when you combine both the advertising line and the streaming advertising line, we are up about 9% versus prior year, and we are up versus 2019 as well. But the meat of your question is really what’s going on today. So, looking at the fourth quarter, we see a combination of headwinds and tailwinds in the quarter. On the headwinds side, we do have some record political comps that we are up against. And yes, some supply chain-driven softness as we sit here today. You mentioned the auto category. There is definitely some softness there. There is some softness in sort of physical tech-related products. What I would say is that this softness translates into people wanting to shift spending out of it to better align with anticipated product availability we are not seeing cancellations. So, it’s more of a shift to better meet when they think their product is going to be available to consumers. At the same time, there are some tailwinds in the quarter, which we are happy about. Obviously, strong upfront pricing kicking in from the last upfront benefit of new fall season, including live sports and live sports, a big scatter driver. When we look at the quarter, we do expect strong growth relative to prior year and 2019 on a combined advertising and streaming advertising basis. So, despite some of these supply chain issues, we still see nice growth. If we look a little bit further out, we don’t really know at the end of the day how this supply chain issue, the…

Thanks, operator. That concludes our Q3 earnings call.