Paramount+ hikes prices as it looks to turn around its business

Paramount Global is raising the prices of its Paramount+ streaming service, joining a growing trend among media companies looking to turn a profit on their streaming businesses. The company announced that the price of the Paramount+ with Showtime plan will increase by $1 to $12.99 per month, and the price of the ad-supported Paramount+ Essential plan will jump $2 to $7.99 per month for new subscribers.

Existing customers will see the price increase for the Paramount+ with Showtime plan hit their accounts on or after September 20th. However, existing Paramount+ Essential customers will keep their current price of $5.99 per month.

Second price increase in less than a year

This is the second price increase for Paramount+ in less than a year. The company last raised prices in June 2023 after adding Showtime to its service, in a push to condense content spending, which has become a particular focus for media companies.

Paramount’s move comes as other media companies are also hiking streaming prices. Comcast’s NBCUniversal recently raised prices for Peacock, and Warner Bros. Discovery announced an increase for its Max service earlier this year.

Profitability takes center stage

The price hikes reflect the growing pressure on streaming services to become profitable. Despite adding millions of subscribers, many streaming services are still losing money. Paramount reported losses for its Paramount+ service in the first quarter of 2024, even though it added 3.7 million subscribers during that period, bringing the total to 71 million. 

The price increases comes after National Amusements earlier this month stopped discussions with Skydance on a proposed merger with Paramount. National Amusements, which is owned by Shari Redstone, the controlling shareholder of Paramount, had previously agreed to economic terms of a merger with a consortium including David Ellison’s Skydance, before ending the deal talks. The company is now considering joint venture opportunities with other media companies and is looking to divest non-core assets.

Paramount is expected to unveil more details about its streaming strategy during its earnings report in August.