Paramount Global is implementing a price hike for its flagship streaming service, Paramount+. The move comes as the company aims to improve its financial performance in the highly competitive streaming industry. Starting from August 20th, new subscribers to the Paramount+ with Showtime plan will see a $1 increase, bringing the monthly cost to $12.99. Additionally, the Paramount+ Essential option will experience a $2 price increase, raising the monthly fee to $7.99 for new subscribers. Existing customers of Paramount+ with Showtime will face the price increase on or after September 20th. However, existing Paramount+ Essential customers, who do not have access to Showtime content, will not be affected by the price change.
This price hike follows a trend among media companies as they seek to generate profits from their streaming services, which have traditionally been loss-making ventures. Paramount executives have expressed their belief in the potential for raising streaming prices multiple times. Comcast’s NBCUniversal, for example, raised prices for its streaming service, Peacock, ahead of the Summer Olympics, which will be broadcast exclusively on NBC and Peacock. This marks Peacock’s second price increase in a year. Similarly, Warner Bros. Discovery announced an increase in the cost of its Max streaming service earlier this month.
Last year, Paramount merged its Showtime and Paramount+ platforms as part of an effort to streamline content spending. In late 2020, the company had already raised prices for Paramount+. Despite these changes, like many other media companies, Paramount experienced losses related to its streaming service. However, during the first quarter of this year, the losses narrowed from $511 million to $286 million. Paramount’s total number of Paramount+ subscribers reached 71 million after adding 3.7 million new subscribers in the first quarter.
The decision to increase prices comes shortly after National Amusements terminated discussions with Skydance regarding a proposed merger with Paramount. National Amusements is owned by Shari Redstone, the controlling shareholder of Paramount. The company is now under the leadership of a trio known as the “Office of the CEO,” consisting of CBS CEO George Cheeks, Paramount Media Networks CEO Chris McCarthy, and Paramount Pictures CEO Brian Robbins. These leaders recently presented their plan to revive the company at Paramount’s annual shareholder meeting, anticipating the collapse of the deal with Skydance. Their strategy includes exploring joint ventures with other media companies in the streaming sector and cutting costs by $500 million, while also divesting noncore assets. Further details will be revealed during Paramount’s upcoming earnings report in August.
In a highly competitive streaming landscape, where content providers are continuously vying for subscribers, price increases have become a common strategy to bolster revenue and improve financial performance. As media companies navigate this challenging environment, it remains to be seen whether Paramount’s latest price hike will be met with acceptance from consumers or if it will impact subscriber growth.
