Paramount+ will have two subscription tiers: a basic one costing $5 a month and a higher level at $10 a month.
The $10 plan will be ad-free and will have some programming not available on the basic, ad-supported tier. Ingredients in the higher-end plan include the live CBS signal, which has been a key element of CBS All Access, the predecessor of Paramount+.
Tom Ryan, president and CEO of ViacomCBS Streaming, announced the pricing and plan details during the company’s online investor day presentation today, saying it will take effect in June. “To quote a line from a CBS classic, the price is right,” Ryan declared.
The base tier, he said, will include “the full spectrum of the Paramount+ experience” at “an incredible value.” Subscribers will get live sports like the NFL and UAIFA soccer; news from CBSN and on-demand CBS News segments; Paramount+ originals; Paramount movies; and “a massive portion” of library titles and current seasons of CBS shows. It will become available in June.
In addition to a lack of ads, the premium tier will offer live sports supplemented by “even more CBS Sports,” Ryan said, without elaborating. News will be “enriched” by news feeds, he said, including local news from stations around the country. Keeping the day’s metaphor going, he promised that premium subscribers’ “mountain of entertainment will get even taller, with the full, live CBS TV experience at their fingertips.” The higher tier will launch next Thursday.
Ryan also said bundles will also be set up for Paramount+ and other, unspecified streaming offerings under the ViacomCBS tent, with a goal of creating an “integrated ecosystem of services.” In a Q&A session with analysts, Ryan said the company settled on the two-tier structure in order to be able to reach the “greatest addressable audience.”
The pricing puts the ViacomCBS at the low-to-mid-range among the spate of new streaming services. NBCUniversal’s Peacock has a free, ad-supported basic tier and a $5 premium level. At the high end is HBO Max at $15 a month. Apple and Disney have staked out the middle ground in subscription streaming. Netflix, the longtime leader in streaming, goes for $14 for its most popular U.S. plan.
The new structure follows the general outline of CBS All Access, which was an early direct-to-consumer offering when it launched in 2015. The basic tier of CBS All Access was $6 a month and it included access to local affiliates, so the shift of those signals to the top tier is a significant change. In another departure from precedent, differentiating the amount of content available means the choices for consumers goes beyond merely whether to have ads or not. Ryan said the new scheme also offers ways for the company to “upsell” viewers of Paramount+ who may want to add Showtime’s OTT service.
A channel on the company’s free, ad-supported service Pluto markets showtime and is an effective customer acquisition tool, Ryan added during the Q&A. He said more information about bundling would be shared soon.
Several analysts seemed to be not completely in sync with the pricing, with some noting the continued growth of Netflix despite several jumps in price. Disney has also bumped up prices for Disney+ and Hulu boosted its premium ticket. One typical question was posed by Vijay Jayant at Evercore ISI. “I’m just trying to understand the economics of this business,” he said. He estimated that the company’s current revenue per subscriber, counting advertising and affiliate fees, comes in at $17 to $18 per traditional subscriber. “When you talk about your pricing for these products, obviously you don’t know what the ad component is, but how is this going to be accretive to the enterprise?”
CFO Naveen Chopra replied by asserting that “scale will present a tremendous opportunity” in streaming compared with traditional distribution. The company also is betting on being able to replicate the “dual revenue stream” approach of traditional pay-TV, with subscription and ad revenue both filling the coffers, he said.
CBS All Access will officially be rebranded as Paramount+ next Thursday in the U.S. and Latin America, with other global territories to follow. Prior to the streaming showcase, ViacomCBS announced it has surpassed 30 million global subscribers to its entire streaming portfolio, which includes niche services like BET+ and Noggin in addition to Paramount+ and Showtime.
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