Paramount+ is set to join the likes of Netflix and Binge by introducing an advertising subscription tier on its streaming service. The advertising tier will first be rolled out in Australia, Canada, Mexico, and Brazil in 2024, with a global expansion to follow. Although specific details about the pricing and launch date are yet to be revealed, this move is expected to provide users with a lower-cost option while bolstering Paramount+’s revenue streams.
In the lead-up to the launch of the advertising tier, Paramount+ will introduce a premium tier in Australia starting from November 16, priced at $13.99 per month. Subscribers to the premium tier will gain access to perks such as four simultaneous streams (compared to two on the current subscription plan), as well as 4K UHD, HDR10, and Dolby Vision capabilities, enhancing their viewing experience.
At present, Paramount+ offers only one subscription option at $9.99 per month, which will remain unchanged for customers who choose not to upgrade to the premium subscription. The streaming service boasts a wide range of popular programming, including hit shows like Yellowjackets, the Frasier revival, Five Bedrooms, One Night, Bargain, and various Taylor Sheridan series such as Special Ops: Lioness, The Mayor of Kingstown, and Yellowstone prequels 1923 and 1889.
However, it is worth noting that Paramount+ does not currently hold the streaming rights to the immensely popular series Yellowstone in Australia, as it is tied up in an existing deal with Stan. Nonetheless, once Yellowstone concludes, any future spin-offs, sequels, or prequels are expected to be exclusive to Paramount+.
The introduction of an advertising subscription tier is a strategic move by streaming services to leverage their subscriber base and generate more revenue per user. When this model was adopted by Netflix, it resulted in a surge of new sign-ups, with the ad-supported tier accounting for 30% of new customers in markets where it was available.
Paramount’s decision to introduce advertising comes at a time when the wider business is facing significant challenges. The company’s controlling shareholder, Sharri Redstone, has reportedly been seeking potential buyers for Paramount, but has struggled to find the right deal. Paramount’s market capitalization currently stands at $7.7 billion, considerably lower than the estimated $30 billion valuation when CBS and Viacom merged in 2019.
In conclusion, the introduction of an advertising subscription tier on Paramount+ marks a significant shift in its business model, seeking to compete with other streaming giants in the industry. As the streaming market becomes increasingly competitive and production costs continue to rise, these changes aim to bolster revenue streams while providing viewers with more options and enhancing their streaming experience.
