Why Paramount+ Plans to Raise Their Subscription Service Price
By Movieguide® Contributor
Paramount announced on Thursday Feb. 16 that they plan to raise the price of their subscription service Paramount+ in Q3 of 2023.
This move follows an announcement in January that Paramount+ will merge with Showtime, combining the streaming services under the name “Paramount+ with Showtime.”
The motivation behind this price change comes as streaming services across the board try to make streaming more profitable.
“We all know streaming represents incredible value for consumers and the Paramount Plus offering is far from the industry price leader,” CEO Bob Bakish said. “We are on the value end of the pricing spectrum. And so, in 2023, we will raise the prices both for Paramount Plus Premium and Essential.”
The “essential plan with advertising” price will increase from $4.99 per month to $5.99 per month, while the premium version will rise from $9.99 per month to $11.99 per month.
Paramount has stated they will focus on producing content based on existing franchises in the coming years. This type of content, such as TOP GUN: MAVERICK, was the streaming service’s largest moneymaker in 2022.
“The higher levels of consumer awareness and built in fan bases associated with [these IPs] drive strong subscriber acquisition volume, lower acquisition costs, lower churn and extend LTVs,” Bakish said.
Bakish later clarified that Paramount would continue to take chances on new IPs despite the focus on current franchises.
Paramount’s price hike is just one of many in the streaming sphere as companies look to improve the profitability of their platforms. Disney+ increased in price at the end of 2022, and Netflix is working to cut down on password sharing.
The popularity of streaming as a whole has started to cool off, with most streaming services bringing in few new subscribers. To keep their platforms profitable, companies may need to focus on the kind of content they produce over simply raising their prices, something Movieguide® has previously reported on.
Movieguide® previously reported on this issue:
Streaming seemed to be the wave of the future, growing at incredible rates in terms of audience numbers and content output. However, a new report shows that streaming growth slowed down for many platforms.
According to Variety, during the last quarter, Netflix saw a loss of 1.3 million subscribers — the largest domestic decline for a streaming platform.
Disney+ added just 100,000 subscribers across the US and Canada, while Peacock’s numbers stayed flat. It appears the NBC streamer has plateaued with just 13 million subscribers 2 years after its launch.
Warner Bros. Discovery’s streaming platforms — HBO, HBO Max, and Discovery+ — lost 300,000 subscribers total.
People are still subscribing to streaming services; just at a much lower rate. Last quarter, there were 13 million new subscribers — an 18% decrease from the previous quarter. Meanwhile, cancellations have remained constant, with 28.5 million users dropping their subscriptions.
Streaming is still popular among those who have subscriptions to different platforms, and it was reported the amount of time spent streaming hit record highs each month of last quarter.
However, total streaming viewing time in North America rose by just 5% last quarter.
These numbers appear to show a slowdown and eventual leveling out for streaming companies. This isn’t a new phenomenon; new businesses always have to adjust once the newness of their product wears off, or fully permeates culture.
There’s no word yet on what big streamers plan on doing to continue to generate revenue, but many think that they will move towards cable’s practices: advertising, bundle packages, and maybe even long-term contracts with content creators.
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