Paramount Global has announced that it will raise subscription rates for its flagship streaming services as part of a broader strategy to recalibrate its business and pay off debt.
The price adjustments come amid failed merger talks between Non-Executive Chairwoman, Shari Redstone, and David Ellison’s Skydance Media regarding the potential sale of Redstone’s controlling stake in Paramount Global to the independent studio, according to sources.
Starting 20th August for new users and September 20 for existing customers, the Paramount+ with Showtime plan will increase by $1, bringing the monthly cost to $12.99. The Paramount+ Essential subscription rate will see a $2 increase for new subscribers, rising to $7.99 per month. However, existing users will continue to pay the current rate of $5.99 per month. Additionally, the limited commercial option for Paramount+ will experience a $1 hike, increasing to $7.99 per month for current customers starting September 20.
In an internal email seen by Reuters, Paramount co-CEOs informed employees earlier in June about the company’s focus on transforming its streaming business. This transformation includes reducing costs and divesting some assets to help manage its debts. “The company will focus on transforming its streaming business, reducing costs, and divesting some assets to help pay its debts,” the email stated.
The traditional TV business of Paramount, which still accounts for more than half of its revenue, has been significantly impacted by an exit of advertisers and the ongoing trend of cord-cutting. In contrast, the company’s streaming service, while smaller than its competitors, boasts over 71 million subscribers. This is compared to Netflix’s 269.60 million subscribers.
Other major players in the streaming industry have also adjusted their pricing strategies. In April, Comcast’s Peacock streaming service announced a rate revision for its premium and premium-plus plans. Additionally, Warner Bros Discovery is reportedly planning to raise prices for its Max streaming platform, according to Bloomberg News in May.
