Paramount Global ended the most-recent fiscal period with 67 million subscribers across the Paramount+, Showtime, Noggin and BET+ streaming platforms. The media giant now believes it will exceed previous year-end estimates of 75 million global subscribers — and plans to raise subscription pricing in the near term, according to CFO Naveen Chopra.
Speaking Nov. 16 at the RBC Capital Markets 2022 Technology, Internet, Media and Telecommunications Conference, Chopra said ongoing consumer adoption of Paramount+, coupled with a strong theatrical slate earmarked for streaming bodes well for Paramount’s positive direct-to-consumer business outlook.
“We’re very bullish about … actually accelerating growth in Paramount+ subscribers … with some adjustment for services we shut down in Russia,” Chopra said. “And that is, again, very much content-driven and distribution-driven.”
The executive said the studio’s six No. 1 box office releases this year (Top Gun: Maverick, Scream, Smile, The Lost City, Jackass Forever, Sonic the Hedgehog 2), the Paramount+ debut of Smile, the arrival of Maverick on the platform in December, new series “Tulsa King,” starring Sylvester Stallone, the next “Yellowstone”-themed series “1923,” and the return (from Netflix) of former CBS series “Criminal Minds” on Thanksgiving, all give management confidence that the previous subscriber guidance was too cautious.
“I couldn’t be more excited about the trajectory that we’re seeing there,” Chopra said.
With that confidence comes the reality that market conditions warrant the pending first-ever price increase for Paramount+, which, coupled with increases in projected ad-revenue from the less-expensive subscription tier, could increase the average revenue per user, or ARPU.
Paramount+ currently costs $5.99 with advertising, and $9.99 without ads. The company expects to have 100 million D2C subscribers by the end of 2024, along with streaming revenue in excess of $9 billion.
“We’re now starting to see some of the other comparable streaming services in the marketplace taking price up, something we expected would happen,” the CFO said. “And that actually gives us room now to start increasing price on our service while maintaining sort of that value positioning. I think the market has not fully appreciated the long-term trajectory that we expect to see in this business.”