Exec: Price Increase Definitely Coming to Paramount+; How Much More Will You Be Paying?
Hold onto your wallets, Paramount+ subscribers, because the price of a subscription is due for an increase. That’s according to Paramount Global Executive Vice President and CFO Naveen Chopra, who spoke to reporters and investors on the company’s third-quarter earnings call on Wednesday.
The call came on the heels of the company reporting that Paramount+ had reached 46 million subscribers worldwide. While it still trails competitors Netflix, Prime Video, and Disney+ by significant amounts, Paramount+ has been one of the most steady and consistently growing platforms both domestically and abroad in recent quarters, giving company execs reason to believe that a rate hike could make sense.
“We definitely see opportunities to increase price on Paramount+ and you will see us do that in the future,” he said. “I think it’s fair to say that pricing is moving higher across the industry; you see that with a number of competing services. And we think that that means we have room to increase price and ultimately drive ARPU [average revenue per user] while preserving our value position relative to others.”
Chopra is undeniably right when referencing the increasing price points for subscriptions across the streaming landscape. Disney has already raised the price of its Hulu subscriptions, and is preparing to increase Disney+ subscription prices at the launch of an ad-supported tier on Dec. 8. Apple TV+ also recently rolled out an unannounced price hike.
Currently, Paramount+ offers two basic subscription tiers; its Essential plan, which is ad-supported and does not include live access to local CBS stations for $4.99 per month or $49.99 annually, and its Premium plan, which is ad-free and includes CBS access for $9.99 monthly and $99.99 per year. So what kind of price increase is the company looking at? Chopra didn’t specify but did offer some hints.
“Of course [Paramount] will be smart about how and when we raise prices because we’ll be looking to do it in ways that minimize any sort of negative churn impact,” he said. “And that means we’ll definitely take advantage of our dual tier offering, which allows us to adjust pricing on each tier independently and means that the Essential tier can continue to serve price-sensitive users while still generating compelling levels of ARPU through ad monetization.”
Those comments suggest that an increase similar to Apple TV+’s could be in the offing at Paramount+. Apple TV+ increased from $4.99 per month to $6.99, which is the same price that Netflix will be offering its Basic with Ads plan at when it launches on Nov. 3. Thus, it would make a ton of sense for the Essential plan to come in around $7-$8 per month when it does increase.
The Premium plan is a little harder to gauge, but industry standards again offer clues. Disney+ is set to increase its ad-free tier to $10.99 per month in December, while HBO Max offers its ad-free tier for $15 monthly. Netflix’s ad-free plans run from $9.99 per month to $19.99 per month, depending on the features that customers want. It is therefore reasonable to assume that the Paramount+ Premium plan will eventually be somewhere between $11-$15 per month.
Chopra didn’t offer any specifics on when the price increases might take effect, but it could be fairly soon. Paramount clearly sees the ground as already having been prepared for a price hike thanks to Apple and Disney, so your streaming bill might see another increase in the not-so-distant future.
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.