(Reuters) -Paramount Global Inc said on Thursday it would raise prices of its flagship streaming service in some markets after reporting a lower-than-expected quarterly revenue, as a broader slump in the advertising market hit the CBS network owner.
Shares in the company fell 7% before the bell. The stock has gained about 45% since the start of 2023 to Wednesday’s close.
Rising prices, higher borrowing costs, easing consumer demand across products and services, and geo-political unrest in certain regions have forced companies to pull back on advertising spending.
TV advertising revenue fell 7% in the three months to December, despite a lift from political advertising on the back of U.S. mid-term elections in November.
Paramount+ added a record 9.9 million subscribers, partly due to the streaming release of hit film “Top Gun: Maverick”, as the business cushions the company in the face of increased cord-cutting.
The company last month said it would integrate Showtime, known for popular shows, including “Billions,” “Yellowjackets” and “Dexter”, with Paramount+ across platforms later this year as it prioritizes streaming services.
Chief Executive Bob Bakish said the company plans to raise prices for its Paramount+ Premium and Essential tiers this year in the United States and in some non-U.S. markets.
The company said it will rise to $11.99 per month from $9.99 for the tier that includes Showtime, and to $5.99 from $4.99 for the tier that does not include Showtime.
Total revenue rose 2% to $8.13 billion in the quarter, but missed expectations of $8.16 billion, according to Refinitiv data.
Operating losses in the company’s direct-to-consumer unit, which houses its streaming services like Paramount+ and PlutoTV, rose to $575 million from $502 million. Investors have focused on the service as the company has outlined plans to spend aggressively on content to fend off competition.
(Reporting by Eva Mathews in Bengaluru and Helen Coster in New York; Editing by Sriraj Kalluvila)
