Paramount will raise the price for its basic streaming plan within the next two years after increasing the cost of Paramount+ with Showtime when it launched earlier this summer, CEO Bob Bakish said.
“Our plan is to raise prices again — this is not our only price increase,” Bakish said Wednesday at the Goldman Sachs Communacopia + Technology Conference in San Francisco. “Whether we do that in ’25 or ’24, we’ll see.”
Reflecting on the company’s revelation in May that the monthly price of its premium segment will increase from $9.99 to $11.99, Bakish explained that the move has not led to higher churn or a drop in subscriber growth. He added, “That proves that we have pricing power in the market given the content we put on the platform,” noting that he believes “there is a lot of room to operate there.”
Asked about the path to profitability, Bakish confirmed previous comments that streaming investment will peak this year. “That’s very much tracking to be the case,” he said. 2024 “will be a year of significant streaming loss improvements.” In its second-quarter earnings reported on Aug. 7, Paramount posted a streaming loss of $424 million, compared to $511 million in the first quarter.
But streaming wasn’t all Bakish was thinking about. Speaking of pay TV, he said, “We continue to make deals without getting into trouble,” in a nod to the ongoing carrier dispute between Charter Communications and Disney, which has left millions of Spectrum subscribers unable to access Disney-owned networks.
“We have co-marketing agreements with every major streaming product distributor,” he explained. “It gives them an incentive to switch and follow that migration in consumer behavior.”
With Showtime, Bakish called Paramount+ the “definitive multi-platform product,” giving consumers access to the offerings in a myriad of ways. He emphasized: “We see it as a natural evolution of the business to work with key distributor partners to offer channels in both (streaming and cable). We don’t care how subscribers get it. I bet that this will increase our linear share compared to the competition.”
Bakish also touched on the free cash flow amid the double strikes of writers and actors and how this has proven to be a “deleveraging element” to reduce debt, along with the sale of Simon & Schuster to a private investment firm for $1 .6 billion. “We very much expect to come out the other side,” he said. “You will see this happen in a meaningful way as we move into 2024 and beyond.”