After reporting lower-than-expected quarterly income, Paramount Global announced on Thursday that it would increase the cost of its flagship streaming service, as a wider slump in the advertising market hit the owner of the CBS network.

The company intends to increase prices for its Paramount+ Premium and Essential tiers in the US and in some non-US countries, 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 program will cost $5.99 instead of $4.99.

As it prioritizes streaming services, the company announced last month that it would integrate Showtime, renowned for popular shows like “Billions,” “Yellowjackets,” and “Dexter,” with Paramount+ across platforms later this year.

Companies have been forced to reduce their spending on advertising as a result of rising prices, higher borrowing costs, declining customer demand for goods and services, and geopolitical unrest in some areas.

Despite a boost from political advertising following the midterm elections in November, TV ad income 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 users for Paramount+, which serves as a buffer for the company against rising cord-cutting.

Related: Showtime Streaming Service To Be Integrated Into Paramount Plus

Refinitiv statistics show that overall revenue increased by 2% to $8.13 billion during the quarter, falling short of expectations of $8.16 billion.

The company’s direct-to-consumer division, which contains its streaming services like 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 intentions to spend heavily on content in order to compete with rival services.

The company’s stock dropped 3.8%. As of Wednesday’s close, the stock has increased by about 45% since the beginning of 2023.


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