Paramount CFO: Paramount+ Has Room to Raise Price After Other Streaming Services Increase Rates
Paramount+ has been considered a value streaming service ever since CBS All Access transitioned to the new name in 2021. At $4.99 per month for its ad-supported plan, it’s one of the cheapest premium streaming platforms currently available, but that reputation for value may soon be in jeopardy.
The discussion of a price increase for Paramount+ follows comments made by Paramount Global CFO Naveen Chopra at the RBC Capital Markets Global Technology, Internet, Media & Telecom Conference on Wednesday. Chopra noted that many services in the marketplace are making such price increases and that Paramount+’s turn may be coming soon
“We’re now starting to see some of the other comparable services in the marketplace taking prices up; not a surprise, something we expected would happen,” Chopra said. “And that actually gives us room now to start increasing price on our service, while maintaining sort of that value positioning.”
Chopra sees any potential price increase as compatible with the platform’s reputation as a good deal for customers, thanks to its less expensive ad-supported tier.
“The fact that we have a two-tier system with a higher-priced ad-free tier and a lower-price ad-supported tier gives us flexibility there, because we still have a place for price-sensitive consumers to be a part of our ecosystem, and we can generate incremental ARPU [average revenue per user] on the premium tier,” he said.
Chopra certainly has a point regarding other services in the marketplace preparing the ground for price increases. Apple TV+, which formerly came in at the same $4.99 per month (though without ads), recently raised its monthly subscription fee to $6.99 per month.
The Disney family of streaming services are in the midst of price hikes, as well. Disney+ is set to introduce an ad-supported tier on Dec. 8, at which time its ad-free plan will increase from $7.99 per month to $10.99. Hulu and ESPN+ have already completed their price increases for the year.
Chopra also has a reasonable argument to make that Paramount+ has been making big strides in adding additional content. The platform will be home to the new “Yellowstone” prequel series “1923” starting Dec. 18. Paramount+ also reclaimed the highly popular series “Criminal Minds” from Netflix recently. Plus, the service will get the No. 1 movie of 2022, “Top Gun: Maverick” at some point before the end of the year.
Chopra didn’t specify when the price increase might occur, or how much the hike would be, but if the company follows the Apple strategy it could come unannounced any day. Paramount+ customers should keep an eye open because their subscriptions will likely be more costly soon.
Paramount Plus
Paramount+ is a subscription video streaming service that includes on-demand access to 40,000+ TV show episodes from BET, CBS, Comedy Central, MTV, Nickelodeon, Nick Jr. and more. The lineup includes “1883,” “Tulsa King,” “Star Trek: Discovery,” Nickelodeon’s “SpongeBob SquarePants,” and “PAW Patrol.” Subscribers can watch the NFL, college football, The Masters, college basketball, UEFA Champions League, UEFA Europa, Serie A, and NWSL. The service also offers the option to watch your live CBS affiliate. The upgraded ad-free package includes premium movies and shows from Showtime.