DTC Losses Continue to Escalate for Paramount; Lowering FVE to $40

Paramount+ reported its strongest performance yet, adding 9.9 million net new subscribers during the fourth quarter, raising its total to 56 million. However, the losses at Paramount’s direct-to-consumer, or DTC, segment continue to mount during and the firm posted a free cash flow loss of $500 million for the full year. While subscriber growth remains a focus, the streaming service will see price increases in the U.S. and select international markets, with the Premium tier (soon to be combined with Showtime) rising to $12 per month from $10 and the Essential (ad-supported) tier increase by $1 to $6 per month. Even with the new focus on revenue, management continues to expect to burn cash once again in 2023 before generating free cash flow in 2024.