Tuesday, November 08, 2022

Paramount May Raise Paramount+ Subscription Prices

Paramount chief financial officer Naveen Chopra said on an earnings call on Wednesday (Nov. 2) that the company sees “opportunities to increase price on Paramount+” and that we’ll see it “do that in the future,”  The Verge reports.

Chopra noted that Paramount+ has some flexibility in how it increases prices, thanks to it having a couple of subscription tiers, notes Digital Trends. The “Essential” plan costs $5 a month or $50 a year and has advertising on its on-demand content, but lacks a feed to your local CBS affiliate, and doesn’t come with 4K resolution or the ability to download offline content. There’s also a $10-a-month ($100-a-year) “Premium” plan that eschews most ads in on-demand content and does include CBS.

“Of course, we’ll be smart about how and when we raise price,” Chopra continued, “Because we’ll be looking to do it in ways that minimize any sort of negative churn impact. And that means that we’ll definitely take advantage of our dual-tier offering, which allows us to adjust pricing on each tier independently, and means that the Essential tier can continue to serve price-sensitive users while still generating compelling levels of [average revenue per user] through ad monetization.”

The price increase also will be done with content in mind, Chopra said. And Paramount+ has a lot of popular shows to work with. The second season of Mayor of Kingstown kicks off on January 15. Yellowstone spinoff 1923 lands on December 18. Star Trek: Picard begins its final season on February 16, 2023, and new seasons of Star Trek: Discovery and Strange New Worlds are on the way.

If the service does end up raising its price in the US, it won’t be alone. Apple TV Plus just increased its price from $4.99 to $6.99 per month, while Hulu went up from $6.99 to $7.99 per month for its ad-supported plan and jumped from $12.99 to $14.99 per month for its ad-free plan.

Netflix raised prices earlier this year ahead of the launch of its new $6.99 per month ad-supported plan, while Disney+ and ESPN+ had recent price hikes as well.

“I think it’s fair to say that pricing is moving higher across the industry — you see that with a number of competing services,” Chopra explains. “We think that means we have room to increase price.” Chopra also hinted at increasing prices by tier while allowing the ad-supported plan to “continue to serve price-sensitive users.” Paramount recently raised the price of its commercial-free plan from $5.99 CAD to $9.99 CAD per month in Canada.

Outside of a potential price increase, Paramount’s earnings report revealed its Plus streaming service added 4.6 million subscribers this quarter, bringing its total global subscribers to 46 million.

Meanwhile, Paramount’s free streaming platform Pluto TV saw some growth, too. The streaming service grew to 72 million monthly active users globally and saw a “double-digit” increase in viewing hours. Paramount says Pluto TV also became the first free, ad-supported service to “represent a significant enough portion of TV viewing” to be featured in Nielsen’s monthly TV viewing Gauge report.

Paramount Plus says it lost 1.9 million global subscribers as part of the launch of SkyShowtime in the Nordics that replaced the streaming service in the region, but the launch of the service in France, Germany, Austria, and Switzerland on December 8th should offset this next quarter.

Paramount Plus links the overall increase in subscribers to its growing library of content, which includes popular series like Halo and Yellowstone. It also credits some of the NFL games it airs through CBS, as well as the UEFA soccer games it offers on the platform.

Going forward, Paramount expects the addition of Top Gun: Maverick to its streaming service later this year to be a “driver of subscribers” as well. The company also launched a partnership with Walmart in September that gives Walmart+ subscribers free access to the ad-supported Paramount Plus plan. Paramount CEO Bob Bakish says the partnership is “off to an excellent start” so far.

Chopra didn’t offer any specifics on when the price increases might take effect, but it could be fairly soon, notes The Streamable. Paramount clearly sees the ground as already having been prepared for a price hike thanks to Apple and Disney, so your streaming bill might see another increase in the not-so-distant future.

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