Streaming fans have a new headache.
Besides price hikes and password-sharing crackdowns, media companies have found another way to make streaming more profitable: cutting back on free trials.
Paramount+ is the latest streaming service to retire its free trial, following the lead of rivals like Netflix, Disney+, and HBO Max. The move comes as Paramount Skydance’s flagship streamer approaches profitability, after growing its subscriber base 10% to 79.1 million in the third quarter.
While free trials can juice a streamer’s growth, they allow binge-watchers to plow through content and cancel before becoming a paying customer.
Paramount Skydance CEO David Ellison said he wants to better balance revenue and profits.
“While we remain committed to achieving scale from a subscriber perspective, we will prioritize quality growth that delivers strong returns,” Ellison said in his quarterly shareholder letter.
Besides hiking Paramount+ prices by $1 a month for both of its plans, Ellison said the company would move away from “low-margin subscriptions,” which means cutting back in certain international markets, reviewing its discounting practices, and nixing free trials.
Media analyst Joe Bonner of Argus Research is less interested in Paramount+ ending its free trial and more focused on its price hikes, which he noted have worked wonders for Netflix.
“The price increases could work, though it is an open question as to whether Paramount has the quality of data to model out the impact on subscriber acquisition and retention,” Bonner said.
Major streamers have largely moved away from free trials.
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Disney+ and Netflix each ended their free trials in 2020 because they felt they didn’t need them. A Disney spokesperson told CNET at the time that the streamer “was set at an attractive price-to-value proposition that we believe delivers a compelling entertainment offering on its own.”
Both Disney+ and Netflix rode explosive growth during the pandemic, and many viewers were already familiar with their content offerings. That’s why ending their trials helped fuel their profitability pushes, without much risk. HBO Max did the same that December.
However, several streaming services still give new customers a sneak peak, including Hulu, Apple TV, and Amazon’s Prime Video.
Hulu offers a 30-day free trial, but it’s only available for the stand-alone ad-supported version — not the ad-free plan or the Disney+ bundle.Apple TV offers a seven-day free trial, or a one-month trial through Apple One, its bundle that includes Apple Music and iCloud storage. Those who buy new Apple products like iPhones and Macs can also get trials for Apple TV.Amazon offers a 30-day free trial for its Prime membership, which includes Prime Video.
One workaround for budget-minded streaming fans are free trials through Amazon’s Prime Video. While Peacock no longer offers a free trial directly, customers can sample it for seven days through Amazon’s video marketplace. The same goes for some smaller streamers, like Starz.
For now, Paramount+ still offers a free trial directly and through Prime Video. Anyone curious about sampling the Taylor Sheridan universe may want to start binge-watching soon.
