Paramount to Raise Paramount+ Prices as It Combines With Showtime
Paramount Global
PARA -3.89%
said it would raise the price of its Paramount+ streaming service later this year, as mounting losses from its streaming business ate into the entertainment company’s quarterly profits.
Paramount+ gained 9.9 million subscribers in the fourth quarter, boosting its customer base to nearly 56 million, the company said Thursday. Paramount credited the National Football League, the expansion of franchises like “Top Gun: Maverick” and “1923,” a spinoff of “Yellowstone,” and new shows like “Tulsa King” for driving subscriber growth.
Paramount is folding its Showtime streaming service into Paramount+ and renaming its Showtime cable channel to become “Paramount+ With Showtime,” which will include programming from both Showtime and Paramount+, as The Wall Street Journal first reported.
As part of that change, Paramount will increase the price of the ad-free premium tier of Paramount+, which will include the Showtime programming, to $11.99 from $9.99, and to $5.99 from $4.99 for the essential tier, which won’t have the Showtime programming and will be ad-supported, the company said Thursday. The changes are expected in the third quarter.
Paramount said fourth-quarter revenue rose 1.6% to $8.13 billion, below Wall Street estimates of $8.17 billion, according to
FactSet.
Net profit tumbled to $21 million, or a penny a share, down from $2.06 billion, or $3.16 a share, in the same quarter a year earlier. The year-ago period included a roughly $1.8 billion gain on the sale of the company’s CBS Studio Center in Los Angeles. Adjusted earnings from continuing operations were 8 cents a share, missing analysts’ estimates of 24 cents a share.
Paramount shares were 4.9% lower in early trading Thursday.
The company said revenue from its direct-to-consumer business rose 30% to $1.40 billion, while costs climbed 25%, reflecting higher content costs and international expansion. The segment’s adjusted loss came to $575 million for the quarter, compared with $502 million a year earlier.
Streaming companies have been working to rein in costs in recent quarters, shifting focus away from the rapid growth that defined the early stages of the sector and instead giving priority to profit.
During the earnings call, Paramount executives said the company expects 2023 to be the peak year in spending and that next year the company will hit positive cash flow and earnings growth.
Paramount CEO
Bob Bakish
said during the call that the advertising market had been tough in 2022 but noted that the company is seeing improvement. “We are seeing some early signs of stabilization in advertising,” he said.
The film business posted revenue of $936 million, up 35% from a year before, boosted by releases of splashy movies such as horror film “Smile” and the continued success of “Top Gun: Maverick.” Costs in the segment climbed 22%.
In Paramount’s core TV business, revenue fell 6.6% to $5.88 billion, dragged down by lower advertising sales and affiliate revenue. Revenue from licensing also fell 11% as the company produced fewer shows for third parties. Costs shrank by 9.4%.
Write to Will Feuer at [email protected] and Jessica Toonkel at [email protected]
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
Paramount Global
PARA -3.89%
said it would raise the price of its Paramount+ streaming service later this year, as mounting losses from its streaming business ate into the entertainment company’s quarterly profits.
Paramount+ gained 9.9 million subscribers in the fourth quarter, boosting its customer base to nearly 56 million, the company said Thursday. Paramount credited the National Football League, the expansion of franchises like “Top Gun: Maverick” and “1923,” a spinoff of “Yellowstone,” and new shows like “Tulsa King” for driving subscriber growth.
Paramount is folding its Showtime streaming service into Paramount+ and renaming its Showtime cable channel to become “Paramount+ With Showtime,” which will include programming from both Showtime and Paramount+, as The Wall Street Journal first reported.
As part of that change, Paramount will increase the price of the ad-free premium tier of Paramount+, which will include the Showtime programming, to $11.99 from $9.99, and to $5.99 from $4.99 for the essential tier, which won’t have the Showtime programming and will be ad-supported, the company said Thursday. The changes are expected in the third quarter.
Paramount said fourth-quarter revenue rose 1.6% to $8.13 billion, below Wall Street estimates of $8.17 billion, according to
FactSet.
Net profit tumbled to $21 million, or a penny a share, down from $2.06 billion, or $3.16 a share, in the same quarter a year earlier. The year-ago period included a roughly $1.8 billion gain on the sale of the company’s CBS Studio Center in Los Angeles. Adjusted earnings from continuing operations were 8 cents a share, missing analysts’ estimates of 24 cents a share.
Paramount shares were 4.9% lower in early trading Thursday.
The company said revenue from its direct-to-consumer business rose 30% to $1.40 billion, while costs climbed 25%, reflecting higher content costs and international expansion. The segment’s adjusted loss came to $575 million for the quarter, compared with $502 million a year earlier.
Streaming companies have been working to rein in costs in recent quarters, shifting focus away from the rapid growth that defined the early stages of the sector and instead giving priority to profit.
During the earnings call, Paramount executives said the company expects 2023 to be the peak year in spending and that next year the company will hit positive cash flow and earnings growth.
Paramount CEO
Bob Bakish
said during the call that the advertising market had been tough in 2022 but noted that the company is seeing improvement. “We are seeing some early signs of stabilization in advertising,” he said.
The film business posted revenue of $936 million, up 35% from a year before, boosted by releases of splashy movies such as horror film “Smile” and the continued success of “Top Gun: Maverick.” Costs in the segment climbed 22%.
In Paramount’s core TV business, revenue fell 6.6% to $5.88 billion, dragged down by lower advertising sales and affiliate revenue. Revenue from licensing also fell 11% as the company produced fewer shows for third parties. Costs shrank by 9.4%.
Write to Will Feuer at [email protected] and Jessica Toonkel at [email protected]
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
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