Paramount+ to Increase Price for First Time Amid Showtime Merge

Paramount Global intends to increase the price of Paramount+‘s monthly subscription costs in 2023 as Showtime‘s streaming service merges into the platform later this year. CEO Bob Bakish announced the plan in a company earnings call on Thursday, February 16.

“We all know streaming represents incredible value for consumers and the Paramount+ offering is far from the industry price leader,” Bakish said on the call, per The Hollywood Reporter. “We are on the value end of the pricing spectrum. And so in 2023, we will raise prices both for Paramount+ Premium and Essential, both in the U.S., and select international markets.”

Currently, Paramount+ Essential costs $4.99/month, Premium is $9.99/month, Essential With Showtime is $11.99/month, and Premium With Showtime is $14.99/month. The premium tier will be renamed Paramount+ With Showtime and will increase by $2, making the monthly ad-free subscription cost $11.99. The Essential price (the tier with ads) will increase by $1 to $5.99/month.

Subscribers can expect the changes to take effect in the third quarter of 2023 when Paramount+ and Showtime combine into one streaming service (the Showtime linear pay-TV channel will also be renamed Paramount+ With Showtime and will allow Paramount+ originals to air on the network). They will apply to both new and existing customers.

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Paramount+ saw strong subscriber gains in the fourth quarter of 2022 when popular titles such as Top Gun: Maverick and 1923 debuted on the streaming service (Maverick broke viewing records for the platform). While Q4 2022 was successful for the brand, executives on the call said their calculations predict a decrease in subscriber numbers when the two services combine.

Paramount CFO Naveen Chopra said on the Thursday call that they predict the restructuring and merger cost to come in at $289 million, and they also expect an impairment charge of $1.3 to $1.5 billion in 2023’s first quarter. Though the cost of the changes are steep, Paramount still foresees this plan resulting in $700 million in savings.

As hinted by recently released and announced projects like Yellowstone spinoff 1923 and the Dexter and Billions expanding universes, Paramount plans to “effectively manage” the content spending in part by focusing on franchises.

“By far our biggest lever to manage spending is to focus on franchises,” Bakish said. “The higher levels of consumer awareness and built-in fan bases associated with this IP drive strong subscriber acquisition volume, lower acquisition costs, lower churn, and extend LTVs.”

“And while we will, of course, continue to take selective swings on new IP,” he added, there’s no question that franchises are a powerful advantage.”

The company intends for 2023 to be the peak of its spending year, resulting in negative free cash flow, but they expect it will go back into the positive in 2024 after a year of restructuring and advertising. They also are hoping for improved ad sales in the latter half of 2023, which will help push them back into the green in 2024 as planned.

Big changes have already begun to hit the platform as it gears up for its biggest shift yet. On February 1, Paramount+ started removing titles from its service, following in the footsteps of HBO Max and Discovery+.

Stay tuned for more on this developing story.