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Paramount+ subscribers should expect a slight bump in their monthly subscription costs later this year. The streaming service’s parent company, Paramount Global, is set to merge SHOWTIME’s streaming service with its existing offerings. The result will be a new tier of service called Paramount+ with SHOWTIME, which will cost $12 per month, a $2 increase from the current price of the Premium tier of Paramount+. Meanwhile, the ad-supported tier, which will not include SHOWTIME, will increase from $5 to $6 per month.
The price hikes are expected to come into effect early in the third quarter of this year, around July or August, and will impact the US and some other markets. These increases will be the first for Paramount+ since it was rebranded from CBS All Access two years ago.
Despite the upcoming price hikes, Paramount+ continues to attract new subscribers, with the service now boasting almost 56 million users. In the last quarter of 2022, Paramount+ added 9.9 million new subscribers, driven in part by the popularity of programs such as NFL games, Yellowstone, and Top Gun: Maverick. Revenue also increased by a significant 81 percent compared to the same period in 2021, to around $800 million.
However, despite these successes, Paramount Global executives cautioned investors that 2022 had been a challenging year and that this year would not be a “robust year” for profits. The company is investing heavily in Paramount+ in 2023, with CEO Bob Bakish remarking that the streaming service is at “peak investment.”
As part of the merger between SHOWTIME and Paramount+, the company expects to take a writedown of between $1.3 billion and $1.5 billion as an impairment charge. According to chief financial officer Naveen Chopra, this writedown is “all about content, driven by the fact that when we combine SHOWTIME and Paramount+, we don’t need the kind of content you would need if they were operating on an independent basis.” Despite this significant writedown, the company is hoping that the merger will ultimately save it up to $700 million.
Paramount+ subscribers can expect a price increase later this year as the streaming service merges with SHOWTIME. While this news may be unwelcome to some, the service continues to attract new subscribers and generate significant revenue for Paramount Global. The company is making a significant investment in Paramount+ in 2023, with executives hoping that the merger will ultimately lead to significant cost savings.