Paramount (PARA) has announced that on June 27th, it will launch its Paramount+ with Showtime streaming service, which will cost $11.99 per month.
Paramount had previously noted it would be merging its Paramount+ and Showtime services into one service, promising that the single service would demonstrate “how we can leverage our entire collection of content to drive deeper connections with consumers and greater value for our distribution partners.”
The offering will arrive just as competition is heating up in the streaming space. On Tuesday, Warner Bros. Discovery (WBD) launched its Max streaming plans, which will cost $9.99 to $19.99.
On Tuesday, Paramount shares rose up to 3.6% as news spread. Regardless, the stock remains down over 10% year to date, and almost 55% off compared to one year ago.
Paramount will offer the new service, which it is calling its “cornerstone” service, alongside the ad-supported Paramount+ Essential plan, and the free, ad-supported Pluto TV service.
The new service will be priced $2 more than the previous subscription price for the Paramount+ service, without Showtime. Paramount also announced it would be pricing the Paramount+ Essential plan at $5.99 per month, rather than the previously announced $4.99 per month.
The Showtime service offers popular shows such as “Dexter,” “Billions,” and “Yellowjackets.” Meanwhile Paramount+ offers such shows as “Tulsa King, “Star Trek,” and “SpongeBob,” as well as movies like “Top Gun” and live events such as the NFL.
In its first quarter report, released earlier this month, Paramount+ was reported to have 60 million global subscribers.
Due to its merging of the two streaming services, the company had previously predicted it would take a content impairment charge in the first quarter of between $1.3 billion to $1.5 billion, however it expects it will see $700 million in saving annually going forward.
It forecasts that those savings, combined with the hikes in the prices of its streaming tiers will raise revenues and lower the pressure on its bottom line, as management guides a return to positive free cash flow and growth in earnings by 2024. Free cash flow was a negative $554 million for the first quarter of 2023, compared to the previous year’s $243 million in the same period.
In the first quarter earnings report it was also announced the company would be cutting dividends, which triggered an immediate 30% drop in the share price.
