Another Big Streaming App Is Moving To Price Out Users
Streaming services like Netflix, Disney, and Paramount+ are facing mounting challenges, with rising costs, sluggish subscriber growth, and the persistent specter of inflation. Compounding these issues, labor strikes in Hollywood have cast a shadow on the future of their content pipelines. In response, many streaming platforms are shifting these financial burdens onto consumers.
Paramount+ is going up in price, again, from $9.99 to $11.99.
Paramount+ recently joined the trend of streaming services increasing their subscription prices, as reported by The Hollywood Reporter. During the Goldman Sachs Communacopia + Technology Conference in San Francisco, Paramount Global’s CEO, Bob Bakish, revealed the company’s intention to raise prices for its streaming plan within the next two years. This announcement comes after the price for Paramount+ with Showtime increased earlier this summer.
The decision by Paramount to raise the price of Paramount+ follows similar moves made by Netflix and Apple Inc. in 2022. Additionally, Walt Disney recently disclosed price increases, including a 27% raise for the commercial-free version of Disney+ to $13.99 per month and a 20% increase for ad-free Hulu, which now costs $17.99 per month. Meanwhile, Peacock, another significant player in the streaming industry, also recently announced its own price hike.
Bob Bakish noted during his discussion at the Goldman Sachs Communacopia + Technology Conference that when the monthly price for the premium tier of Paramount+ jumped from $9.99 to $11.99, the move didn’t have a negative impact on the platform’s subscriber count. He asserted that this indicated the company’s pricing influence in the market, driven by the content it offers. Furthermore, Bakish expressed his optimism about the platform’s potential for continued growth in this regard.
The decision by Paramount to raise the price of Paramount+ follows similar moves made by Netflix and Apple Inc. in 2022.
The fastest route to boosting operating income in the direct-to-consumer market is undoubtedly through paid subscribers. Paramount+ gained an impressive 700,000 subscribers in the latest fiscal quarter, reaching a total of 61 million. Bob Bakish is optimistic about the platform’s potential to acquire more subscribers willing to pay higher fees, which could contribute to the company’s goal of achieving a 20% increase in ARPU (average revenue per user) by 2024.
To help grow subscriptions, Bob Bakish disclosed that Paramount+ strategically collaborated with established distributors during its European launches in the United Kingdom and France, effectively lowering the costs associated with acquiring new subscribers. Paramount+ partnered with Canal+ in France to bolster consumer awareness and enhance traction. Bakish further highlighted that this approach reduced the necessity for extensive local marketing, content investments, and platform expenditures and fostered mutually beneficial relationships with prominent local streaming players.
While numerous streaming platforms, including Paramount+, have yet to encounter significant issues due to price increases, it’s important to acknowledge the potential for future challenges.
Currently, Paramount+ with Showtime is offered at a monthly rate of $11.99. Meanwhile, the more budget-friendly ad-supported Essential tier, which excludes Showtime, has risen in price from $4.99 to $5.99 per month. Those who are already subscribed to the Paramount+/Showtime bundle will not experience any changes in their subscription costs.
While numerous streaming platforms, including Paramount+, have yet to encounter significant issues due to price increases, it’s important to acknowledge the potential for future challenges. As the costs of streaming services continue to rise and ad-supported alternatives become more prevalent, the sustainability of current pricing models may face scrutiny. Platforms must remain vigilant and adaptable to ensure they can navigate any obstacles that lie ahead in an ever-evolving streaming landscape.
