Paramount+ is planning upcoming subscription hikes
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Soon, Paramount+ subscribers will have to shell out more per month to access the same subscription tiers. The streaming service announced that it would increase the cost of both its “Essential” and “Premium” plans in 2023 during an earnings call with investors Thursday morning.
Currently, the lower-cost, ad-based plan costs $4.99 per month, but plans to increase to $5.99. The rewards plan will increase from $9.99 to $11.99, announced the company’s chief financial officer, Naveen Chopra. The price increases are scheduled for the third quarter of this year and will come with the launch of the upcoming integrated service Paramount+ and Showtime.
Specifically, only the Premium tier subscription grants customers access to Showtime content. Essential subscribers are still limited to just Paramount’s standard plan (which is…okay)—and still pay an elevated plan.
The price change comes amid less than stellar financial news for Paramount Global Inc., the parent company of Paramount+. The media giant announced lower earnings than forecast in its last quarterly report 2o22 after some financial analysis. The company raised $8.13 billion versus $8.17 billion expected. Paramount+ also missed its monthly active user projections, reporting 2 million fewer regular users than expected, according to reports from Yahoo Finance and the Wall Street Journal.
To explain these tax shortfalls, the company blamed “advertising headwinds” as the main factor. The advertising market took a major hit across platforms in 2022, and 2023 may not get any better. Also, fewer people seem to be signing up to new streaming services in the post-lockdown days, and some are even giving theirs up to previous allegiances.
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Amid the decline in customer enthusiasm and advertisers, streaming services from Netflix to Disney+ have certainly felt the sting — many heavyweights have had a tumultuous past 12 months and raised their prices in response. But even those subscription increases may not be enough.
As competition between these companies has increased, the flaws in the streaming services’ business model have become increasingly apparent. For one thing, companies can’t expect to grow their subscriber bases indefinitely — especially in such a saturated market. For two, producing original content is expensive, and a flat monthly subscription fee probably doesn’t cover the ever-increasing pressure to offer more binge-worthy shows and movies.
Paramount executives vowed things will change soon. And compared to other services, Paramount+ is still attracting a respectable number of subscribers (9.9 million new subscribers — the most of any service added last quarter). But overall, the bleak outlook for streaming services could be less of a blip and more of a return to reality.
