Get ready to pay more for Paramount+. At some point. Eventually. And we don’t know how much. But a price increase is coming, Paramount Chief Financial Officer Navveen Chopra said on the company’s third-quarter earnings call.
Why? Largely because the other on-demand streaming services have paved the way for it.
“We definitely see opportunities to increase price on Paramount+,” Chopra said in response to Deutsche Bank’s Brian Kraft. “And you will see us do that in the future. 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.”
Chopra didn’t say which comparable streaming services have paved the way for higher prices, but the Disney-owned troika of Hulu, ESPN+, and Disney+ offers one easy example. Netflix is another.
But Chopra noted that Paramount+ has some flexibility in how it increases prices, thanks to it having a couple of subscription tiers. The “Essential” plan costs $5 a month or $50 a year and has advertising on its on-demand content, but lacks a feed to your local CBS affiliate, and doesn’t come with 4K resolution or the ability to download offline content. There’s also a $10-a-month ($100-a-year) “Premium” plan that eschews most ads in on-demand content and does include CBS.
Those two tiers could see prices increase simultaneously, or separately. If Paramount has decided exactly how and when it’s going to make a change, execs aren’t saying just yet. But they’ll do so in a way that they hope will minimize cancellations, which they call “churn” in industry lingo.
“Of course, we’ll be smart about how and when we raise price,” Chopra continued, “Because we’ll be looking to do it in ways that minimize any sort of negative churn impact. And that means that 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 [average revenue per user] through ad monetization.”
The price increase also will be done with content in mind, Chopra said. And Paramount+ has a lot of popular shows to work with. The second season of Mayor of Kingstown kicks off on January 15. Yellowstone spinoff 1923 lands on December 18. Star Trek: Picard begins its final season on February 16, 2023, and new seasons of Star Trek: Discovery and Strange New Worlds are on the way.
Will you need to pay more for Paramount+ before or after those series get going again? We’ll just have to wait and see.
Paramount+ has 46 million subscribers worldwide, its parent company announced with its third-quarter earnings. It’s available on every major streaming platform, including Roku, Amazon Fire TV, Apple TV, Android TV, Google TV, on smart TV sets, and in a web browser.
