Paramount to Raise Streaming Prices as Ad Revenue Falls

On Thursday, Paramount Global said it would raise prices for its flagship streaming service after reporting lower-than-expected quarterly earnings as a wider ad market downturn hit network owner CBS.

CEO Bob Bakish said the company plans to raise prices for the Paramount+ Premium and Essential tiers in the US and select non-US markets.

The price for the tier that includes Showtime will rise to $11.99 per month from $9.99, while the non-premium channel tier will jump to $5.99 from $4.99.

The company said last month that later this year it will integrate Showtime, known for hit shows including Billions, Yellow Vests and Dexter, with Paramount+ across platforms as streaming services prioritize.

Rising prices, higher borrowing costs, weakening consumer demand for products and services, and geopolitical unrest in some regions have forced companies to cut advertising spending.

TV advertising revenue fell 7% in the three months to December, despite a rise in political ads due to the midterm elections in November.

Paramount+ added a record 9.9 million subscribers, thanks in part to the streaming release of the hit Top Gun: Maverick, as business shields the company from mounting cost cuts.

Total revenue rose 2% to $8.13 billion for the quarter, but fell short of expectations of $8.16 billion, according to Refinitiv data.

Operating losses for the company’s consumer-facing arm, which hosts streaming services such as Paramount+ and PlutoTV, rose to $575 million from $502 million. Investors have focused on the service as the company charted plans to spend money aggressively on content to counter the competition.

The company’s shares fell 3.8%. Shares are up about 45% from the start of 2023 to close on Wednesday.