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After posting lower-than-expected quarterly income, Paramount Global said on Thursday that it will increase the cost of its main streaming service, as a wider collapse in the advertising market struck the owner of the CBS network.
The business intends to increase pricing for its Paramount+ Premium and Essential levels in the US and in several non-US territories, according to Chief Executive Bob Bakish.
The tier with Showtime will cost $11.99 per month instead of $9.99, and the tier without the premium channel will cost $5.99 instead of $4.99.
As it focuses streaming services, the business said this month that it will merge Showtime, renowned for blockbuster series like “Billions,” “Yellowjackets,” and “Dexter,” with Paramount+ across platforms later this year.
Companies have been obliged to reduce their expenditure on advertising as a result of price increases, greater financing costs, a decline in customer demand for goods and services, and geopolitical turmoil in some areas.
Despite a boost from political advertising following the midterm elections in November, TV ad revenue decreased by 7% in the three months leading up to December.
The streaming release of the popular movie “Top Gun: Maverick” contributed to the record-breaking addition of 9.9 million new members for Paramount+, which serves as a buffer for the firm against rising cord-cutting.
Refinitiv figures show that overall sales increased by 2% to $8.13 billion for the quarter, falling short of projections of $8.16 billion.
The company’s direct-to-consumer division, which contains major streaming services including Paramount+ and PlutoTV, saw an increase in operating losses from $502 million to $575 million. Investor attention has been drawn to the service as a result of the company’s ambitions to spend much on content in order to compete with other services.
The company’s stock dropped 3.8%. As of Wednesday’s closing, the stock had increased by nearly 45% from the beginning of 2023.
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