Thursday, December 08, 2022

Paramount CEO Bob Bakish Confirms Price Increase Coming to Paramount+

Things may be about to get more expensive at Paramount+.

This week, Paramount Global Chief Executive Officer Robert Bakish confirmed the media company is currently evaluating ways to raise the price of its flagship streaming service, with customers paying for the most-expensive tier of Paramount+ likely to be impacted first.

The “Premium” plan, which offers live access to a user’s local CBS station or affiliate and eliminates commercials from most on-demand TV shows and movies, currently costs $10 a month or $100 a year. A cheaper, ad-supported “Essential” plan that offers live access to a limited amount of CBS sports content costs $5 a month or $50 a year. As of November, around 67 million global customers subscribe to Paramount Plus or another one of Paramount’s direct-to-consumer streaming products.

Paramount Plus offers daytime, prime-time, sports and news programming from CBS along with Paramount’s film studio and cable television brands, among them Nickelodeon, Paramount Pictures, Smithsonian Network, Nickelodeon, MTV, Comedy Central and BET. Movies and TV shows from Paramount’s premium cable network Showtime is available for a separate charge.

Speaking at the UBS Global Technology, Media and Telecommunications Conference on Tuesday (Dec. 6), Bakish said Paramount was weighing a price increase on the pricier tier of service because it would likely convince customers to take the cheaper, ad-supported plan instead of canceling their subscription entirely.

“We’re very much value priced,” Bakish asserted. “We will move the price up, no question about it.”

Bakish’ comments echoes statements made by other Paramount Global executives as early as November, who said the company was evaluating the core pricing of Paramount Plus and searching for opportunities to raise fees on subscribers.

“I think it’s fair to say that pricing is moving higher across the industry — you see that with a number of competing services,” Naveen Chopra, Paramount Global’s Chief Financial Officer, said on a conference call with investors last month. “And we think that means we have room to increase price and ultimately drive [average revenue per user, or ARPU] while preserving our value position relative to others.”

Less clear is when Paramount might move forward with a price hike, or how much a more-expensive Paramount Plus will cost. But the consideration comes as Paramount Global continues to take a financial loss on the company’s streaming endeavors, with content spending and marketing outpacing revenue from advertising and subscriptions.

The situation is not unique to Paramount: Other media brands, including Netflix the Walt Disney Company and Comcast’s NBC Universal, are under pressure to turn a profit with their streaming products. Investors who largely gave media companies the freedom to build out their streaming products have seen the number of streaming customers skyrocket, but few streaming products on the market are profitable.

Netflix has offset content spending over the last few years with steady price increases, and recently introduced an ad-supported plan to help offset its pricier tiers. As of October, Netflix had around 223.1 million global subscribers, including 73.34 million customers in the United States and Canada.

This week, Disney will roll out an ad-supported version of its Disney Plus streaming service that will cost around $8 a month or $80 a year. The current price of Disney Plus, which doesn’t include advertisements, will go up to $11 a month or $110 a year. Disney’s general entertainment service, Hulu, will see a similar price increase. The cost of Disney’s standalone sports streamer, ESPN Plus, went up to $10 a month in August.

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Original source: The Desk.

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