Showtime’s merging with Paramount+ isn’t coming cheap for subscribers.
The Paramount+ with Showtime “premium” tier of Paramount Global’s core streaming service will see its price rise later this year from $9.99 per month to $11.99 per month. The Paramount+ “essential tier,” which does not include Showtime content (but does include commercials), is rising from $4.99 to $5.99. The changes will come in the third quarter of 2023, when Paramount+ with Showtime becomes an integrated service.
The price increases are overdue when you look at industry trends, Paramount Global CFO Naveen Chopra said on the company’s Thursday earnings call. Though the price increase will be for both new and existing subscribers, Chopra expects it will impact new signups more so than lead to significant cancellations. And it just “makes sense” to tie the bigger price increase to the tier-expanding content and to keep the lower increase at entry level.
Showtime’s own over-the-top app will be shuttered when Paramount+ with Showtime becomes official. The premium-cable channel, which will also be rebranded as Paramount+ with Showtime, stays — for now, at least.
The combination of the brands means certain Paramount+ originals will air on Showtime’s linear channel. It could also be the next-to-last step toward fully folding Showtime into Paramount+, which would mean the end of the linear channel altogether. The two previously joined forces via a Showtime tile inside Paramount+.
Paramount+ added nearly 10 million subscribers in the final quarter of 2022 — but it came at a great cost. Read all about Paramount Global’s Q4 performance here.
A snapshot of the streaming side: Paramount Global ended 2022 with more than 77 million direct-to-consumer subscribers, the company said; nearly 56 million of those came from Paramount+. That means the core streamer added 9.9 million subs in the final quarter of the year, a record.
Unfortunately, the actual financial figures were not as impressive. While streaming revenue rose 30 percent, operating expenses increased 25 percent.
As a result, shares of Paramount Global (PARA) opened down 10 percent on Thursday. However, since the U.S. stock markets opened for their regular trading day at 9:30 a.m. ET, shares of PARA have rallied back to be down just 4 percent currently. Chalk that comeback up to the Q4 conference calls promises to cut costs and plans to return to earnings growth.