Paramount to raise streaming prices as ad slump weighs on revenue
Technology
Paramount to raise streaming prices as ad slump weighs on revenue
(Reuters) - Paramount Global Inc (PARA.O) said on Thursday it would raise prices of its flagship streaming service in some markets after reporting lower-than-expected quarterly revenue, as a broader slump in the advertising market hit the CBS network owner.
Shares in the company fell 7% before the bell. The stock has gained about 45% since the start of 2023 to Wednesday’s close.
Rising prices, higher borrowing costs, easing consumer demand across products and services, and geo-political unrest in certain regions have forced companies to pull back on advertising spending.
TV advertising revenue fell 7% in the three months to December, despite a lift from political advertising on the back of U.S. mid-term elections in November.
Paramount+ added a record 9.9 million subscribers, partly due to the streaming release of hit film “Top Gun: Maverick”, as the business cushions the company in the face of increased cord-cutting.
The company last month said it would integrate Showtime, known for popular shows, including “Billions,” “Yellowjackets” and “Dexter”, with Paramount+ across platforms later this year as it prioritizes streaming services.
Chief Executive Bob Bakish said the company plans to raise prices for its Paramount+ Premium and Essential tiers this year in the United States and in some non-U.S. markets.
The company said it will rise to $11.99 per month from $9.99 for the tier that includes Showtime, and to $5.99 from $4.99 for the tier that does not include Showtime.
Total revenue rose 2% to $8.13 billion in the quarter, but missed expectations of $8.16 billion, according to Refinitiv data.
Operating losses in the company’s direct-to-consumer unit, which houses its streaming services like Paramount+ and PlutoTV, rose to $575 million from $502 million. Investors have focused on the service as the company has outlined plans to spend aggressively on content to fend off competition.
