Paramount+ just sent out an email announcing a price decrease. Here is the text:
Your Plan Price Has Changed
Great news! As of 2/16/23, the price of your Paramount+ Premium with SHOWTIME® plan has DECREASED, from $14.99/month or $149.99/year, to $11.99/month or $119.99/year. This is the new, low price for the Premium with SHOWTIME® plan. The pricing change will go into effect at the start of your next billing cycle.
What is going on? The entire world, including my clients, are figuring out how to raise prices. This is the only price decrease that has come to my attention (or pocketbook) in years. My guess is Paramount is unhappy with their number of subscribers and want to grow both unit sales and revenue. (I know, brilliant deduction.)
This brings three thoughts to mind. First, will it work? I always put myself in the shoes of the buyer to think through their decision. I doubt that $3/month would change anyone’s mind as to whether or not the service is worth it. This is the Will I decision. However, I would bet that many people (including me) are subscribed to several video streaming services, and inflationary pressures motivate them to trim back a little. So, these subscribers are deciding which services to discontinue. In this decision, the $3 may make a difference. From Paramount’s perspective, it’s much easier to grow, when they slow down the churn.
My second thought is about their communication. I think they missed a big opportunity to announce how they look out for their customers. How they care. Look at the headline. “Your plan price has changed.” That should have at least said, “your price went down.” I’d have preferred, “To you, our valued customer, we are lowering your price.” This could be a point of differentiation and make it even less likely someone will churn.
Third, I wouldn’t have recommended this tactic. Sure, I don’t have as much information as they do, but I have a general rule, never lead a price decrease. The only(?) time I recommend a price decrease is when you follow your competitors. If you decrease your price first, then competitors are likely to follow, which hurts industry profits without increasing your market share.
But the good news is I just saved $36/year. Can you discern any other lessons from this tactic?
Now, go make an impact!price, pricing