Paramount Global said Thursday it would raise prices of its flagship streaming service after reporting a lower-than-expected quarterly revenue, as a broader slump in the advertising market hit the CBS network owner.
Chief Executive Bob Bakish said the company plans to raise prices for its Paramount+ Premium and Essential tiers in the United States and in some non-US markets.
The price for the tier that includes Showtime will rise to $11.99 per month from $9.99, while the tier without the premium channel will jump to $5.99 from $4.99.
Last month, the company 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.
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 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.
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.
Shares in the company fell 3.8%. The stock has gained about 45% since the start of 2023 to Wednesday’s close.