Paramount+ To Raise Subscription Prices After Combining With Showtime - Here's What We Know
A bit of bad news for Paramount+ subscribers, and perhaps a bit of mixed news for Showtime subscribers. Paramount Global has announced that the price of its flagship streaming service will increase later this year, though the increase is relatively minimal and it all has to do with the fact that Paramount+ is being combined with Showtime in the third quarter of this year. So, once it becomes Paramount+ with Showtime, subscribers will be paying a bit more for the privilege of watching shows like "Billions" and "1923" under the same roof.
The news was revealed during Paramount's recent quarterly earnings call for the fourth quarter of 2022. So, what's the streaming home of "Top Gun: Maverick" and all of Taylor Sheridan's many shows going to cost in the future? The ad-free version of Paramount+ with Showtime will go for $11.99 for Paramount+ with Showtime, representing a $2 increase from the current $9.99 price. Meanwhile, the "essential" plan with ads will go from $4.99 a month to $5.99. Paramount CEO Bob Bakish had this to say about it:
"We all know streaming represents incredible value for consumers and the Paramount+ offering is far from the industry price leader. We are on the value end of the pricing spectrum. And so in 2023, we will raise prices both for Paramount+ Premium and Essential, both in the U.S., and select international markets."
The idea is that the combined forces of Paramount+ and Showtime will give the company a more meaningful way to compete in the streaming wars alongside giants like Netflix, HBO Max, and Amazon Prime Video. The industry-wide focus is now on making streaming profitable sooner rather than later. Disney, to that end, recently increased the price of Disney+ and plans to lay off 7,000 employees.
With their powers combined
The media landscape has been changing greatly (and rapidly) since last year, with most every major media company making huge changes and scaling back spending. Combining Showtime and Paramount+ is about consolidation and controlling spending, along with a shift in overall strategy. In the short time, Paramount is taking a $1.3 billion to $1.5 billion impairment charge related to content, meaning that assets the company owns have lost a great deal of value. But, in the long term, Paramount says it should see $700 million of future savings annually. The plan is to reduce operating expenses in marketing, in addition to content expenses related to integrating Showtime. It's about the long game here.
Overall, Paramount+ now has 56 million subscribers, with the company's total streaming subscribers now sitting at 77 million. They added more than 10 million subscribers in the most recent quarter. Plus, Pluto TV now has nearly 80 million active users. The perceived added value of Showtime could help grow that base in the long run. Meanwhile, Bob Bakish also explained that the idea is to take a "quality over quantity" approach, while leaning into franchises more:
"By far our biggest lever to manage spending is to focus on franchises. The higher levels of consumer awareness and built in fan bases associated with this IP drive strong subscriber acquisition volume, lower acquisition costs, lower churn, and extend LTVs (lifetime values). And while we will, of course continue to take selective swings on new IP, there's no question that franchises are a powerful advantage."
In short, expect to see more "Yellowstone" spin-offs, "Transformers," and things of the like, in addition to "Billions" and "Dexter" spin-offs in the future, and less stuff like "American Gigolo." Will that strategy help them survive the streaming wars when the dust settles? Time will tell.