Paramount’s fourth quarter results point to the continuation of well-established trends, with the company adding a substantial number of new subscribers to its streaming services but struggling to contain costs for producing new content and stem the continued decline in revenues from its traditional TV businesses.
During an earnings call with investors, Paramount Global President and CEO Bob Bakish celebrated adding 9.9 million new subscribers to Paramount+ as well as a 30% increase in ad revenue from Pluto, the company’s free streaming service. These positive developments were tainted by a $500M revenue drop in the company’s cable and linear TV networks, which remain the single largest revenue source for the company. Bakish concluded that its continued investments in growing Paramount+ are justified to make up for the decline in revenues from its traditional businesses.
Paramount also laid out more details on its plan to fold the Showtime channel into Paramount+. CFO Naveen Chopra projected that merging the two networks will cost an eye-popping $1.3B – $1.5B. After the combination, the new-and-improved service will increase prices for its subscribers, with the monthly cost for the top tier of service rising to $11.99 from $9.99, and the budget, ad-supported tier moving to $5.99 from $4.99.
See also: Paramount+ To Boost Prices After Showtime Merge, Paramount Global Will Take Up To $1.5 Billion Q1 Content Charge (Deadline)