With 56 Million Subscribers, Paramount+ Is Considering A Price Increase

Paramount Global announced plans to raise the price of Paramount+ this year after reporting that its streaming business expanded during the fourth quarter.

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Despite adding additional streaming subscribers, Paramount said that the company's fourth-quarter revenue fell 7% from the previous year to about $5.9 billion as a result of the sluggish advertising market.

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Early on Thursday, shares of Paramount were down roughly 3%.

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The company had earlier issued a warning about the weak advertising market, and on Thursday it reported a 5% decline in ad revenue as a result of rising political advertising that was only partially offset by the global market. The 4% decline in affiliate and subscription revenue was attributed to cord-cutting.

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On Thursday, company leaders predicted that the advertising industry would recover in the second half of 2023.

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Pluto, a free ad-supported streamer, and the company's other direct-to-consumer streaming operations also witnessed growth of 4%.

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The management of Paramount stated that 2023 will be the year of most investment for its renowned streaming service during a call with investors on Thursday. Like its competitors, Paramount has been concentrating on turning its streaming business profitable soon.

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According to CFO Naveen Chopra, "Paramount+ continues to be an amazing value offer for consumers."

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Later this year, when Paramount+ and Showtime merge, the price increases will go into effect. The premium Paramount+ tier, which will include Showtime, will climb to $11.99 from $9.99, according to CFO Naveen Chopra, while its lower-priced tier, which excludes Showtime content, will rise by $1 to $5.99.

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The third quarter will see the pricing rises and the joining with Showtime.

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A record number of members were added to Paramount+ during the fourth quarter after the streamer changed its name from CBS All Access in 2021. Throughout the fourth quarter, nearly 56 million people were reached by Paramount+.

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Gratis streaming services like Pluto and Fox Corp.'s Tubi have been bright spots for media businesses, with Pluto seeing monthly active users increase by 6.5 million during the quarter and global total viewing hours up "high double digits quarter-over-quarter."

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The acquisition of the box office champion "Top Gun: Maverick" in late December and the simulcasting of NFL Sunday games with the company's CBS broadcast network were both cited as reasons for the increase in Paramount+ subscribers. The "Yellowstone" and "Criminal Minds" franchises' original content contributed to the increase in subscribers.

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On Thursday, CEO Bob Bakish anticipated more franchise content coming out this year, particularly in theaters, including the next "Scream," "Transformers," and "Mission: Impossible" films.

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Also, by combining the Showtime and Paramount+ platforms, media corporations will be able to reduce their expenditure on content, which has recently taken a greater emphasis. Warner Brothers Discovery

immediately after its merger was completed, content costs were drastically reduced.

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Disney announced last week that it would reduce expenditures by $5.5 billion, $3 billion of which would be spent on content. The firm would rely on its franchise strength, according to Disney's returning CEO Bob Iger, who said last week on Trade Algo that he didn't consider general entertainment as a "differentiator," particularly on pay-TV and streaming.

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Although Bakish noted on Thursday that the business's general entertainment assets—the company now owns a portfolio of cable-TV networks like Comedy Central and MTV—were part of its strengths, Paramount has long talked about its reliance on franchises across both TV and cinema.

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When looking at our asset combination, the general entertainment sector may not make sense for everyone, but it certainly does for us, according to Bakish, who also said that the firm had confidence in its sports and general entertainment strategy when it launched Paramount+.

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Bakish claimed on Thursday that the business has long engaged in activities that other media companies are concentrating on right now, such as Paramount+, a free platform with ads, Pluto, and relying on its property rights.

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