Take your media strategy to the next level at Mediaweek. Cultivate new media partnerships and gain tools to standout across platforms from experts at Youtube, Peloton, LTK and more. View agenda.
Paramount+ is continuing a costly streaming TV trend.
What’s happening
Today, Paramount+ announced price increases for both Paramount+ with Showtime and the Paramount+ Essential plan, its lowest ad-supported tier.
Paramount+ with Showtime will increase by $1 to $12.99/month, and the Paramount+ Essential plan will increase by $2 to $7.99/month for all new subscribers.
The new pricing will start Aug. 20 for all new Paramount+ customers. Existing Paramount+ with Showtime subscribers can expect to see the change in their next bill or after Sept. 30. According to the company, the Limited Commercial Plan will also increase by $1 to $7.99 for current subscribers.
Existing Paramount+ Essential subscribers will stay at the current price of $5.99/month. Plus, the pricing of both annual subscriptions remains unchanged.
Why it’s happening
The exorbitant cost of streaming is pushing companies all over to increase prices while gently nudging subscribers toward lower-priced ad tiers, which often bring in much higher average revenue per user (ARPU).
For instance, in closing its first upfront last year, Netflix disclosed that its average revenue per user, which it described as ARM (average revenue per member), for its ad tier was already greater than its standard plan. Disney+ also saw an early increase in ARPU after launching its ad-supported plan.
By leaving existing customers of the Essential tier at $5.99 ahead of the price change in August, Paramount is encouraging consumers to stay on its ads plan. Meanwhile, despite the impending price increase of the Essential ad tier, it’s still significantly lower than the company’s more premium subscription plan—and on par with many industry competitors.
Related video
What else to know
Paramount+’s price increase is just the latest in the industry.
Earlier this month, Max announced a $1 price increase to its ad-free plan, bringing the cost to $16.99/month. Meanwhile, the company’s Ultimate Ad-Free plan also increased $1 to $20.99/month. Its ad-supported plan remained unchanged at $9.99/month.
Additionally, beginning in July, the price of Peacock Premium, the NBCUniversal streamer’s ad-supported tier, will increase by $2 to $7.99/month. The ad-free version, Premium Plus, will also see a $2 bump to $13.99/month.
