Following the major integration of Showtime into Paramount+ two weeks ago, Paramount reported its quarterly earnings this morning, announcing that Paramount+ gained 9.9 million subscribers in Q4 to bring the total to 56 million subs, up from 46 million in the previous quarter. This means Paramount+ has more customers than Hulu, which recently reported 48 million subs. The company also confirmed it would raise prices across its service due to its combination with Showtime.
However, Paramount+ barely missed analyst expectations, who predicted a net addition of 10 million subscribers. Across Paramount+, Showtime, BET+, and Noggin, the company grew by 10.8 million direct-to-consumer (DTC) subs, reaching a combined total of 77 million customers.
Paramount revealed during its earnings call that it would no longer report total combined DTC subscribers starting in Q1 2023.
Paramount’s free, ad-supported streaming service Pluto TV saw an increase in global monthly active users, bringing its new total to 78.5 million. Rival Tubi, on the other hand, only has 64 million monthly active users.
The most significant news of the quarter for the streamer was the announcement that, later this year, it would be integrating Showtime into its platform. “Paramount+ with Showtime” will directly compete with Warner Bros. Discovery’s upcoming HBO Max/Discovery+ service.
During the earnings call, the company announced that it would be increasing the pricing of its Paramount+ Premium tier from $9.99/month to $11.99/month to reflect the new Showtime content. The Essential tier, which won’t include Showtime, is moving from $4.99/month to $5.99/month. Existing and new customers will see the price changes when Paramount+ with Showtime launches in early Q3 2023.
Customers were expecting a price increase after CEO Bob Bakish confirmed the plans in December.
As a result of the consolidation, the company warned investors that it expects a reduction in total subscribers in Q1 2023 since the Showtime subscriber base includes both subscribers who use the Paramount+ and Showtime bundle, which launched last summer, or subscribe to both streaming services independently.
Also, the company revealed that its streaming losses widened again to $575 million from $502 million in Q4 2021. Meanwhile, direct-to-consumer revenue increased 30% year-over-year, with subscriptions experiencing revenue growth of 48% year-over-year. Paramount+ revenue 81% year-over-year.
“Our content and platform strategy is working and with even more exceptional content coming this year, we expect to return the company to earnings growth in 2024,” Bakish wrote in the letter to shareholders.
The company added that Paramount+ subscriber growth was mainly driven by its content slate, including “Top Gun: Maverick,” which launched on Paramount+ on December 22, as well as the NFL games and new titles like “Tulsa King,” starring Sylvester Stallone and horror film, “Smile.”