The concept of an ad-supported tier of streaming services has long been a bit on the controversial side. Some think it is a good way to improve accessibility, while others just find it as exploitative a practice as it was on cable, forcing viewers to effectively pay twice. But in Europe, Paramount+ viewers will now have access to an ad-supported tier, and the move proved no help at all, with shares down over 4% in the closing minutes of Friday’s trading.
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A new report from Techradar revealed that the new tier for Paramount+ users in the United Kingdom and Ireland will offer lower prices for those willing to watch advertising during their streaming video. A premium tier, meanwhile, will also offer an “elevated viewing experience,” which, presumably, means “no ads.” Paramount here is following on the heels of several of its larger competitors, Netflix (NFLX) not among the least of them.
The Techradar report also wondered if, with all these new ad-supported tiers coming online, we were basically returning to the point where we are effectively back to cable television, but all online. Given that this is the first time Paramount has rolled out an ad-supported tier in Europe, that may be a bit too far. But, with so many other services doing it, there becomes little functional difference between paying for a bundle of cable channels with ads and paying for several streaming services with ads.
Is Paramount Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Hold consensus rating on PARA stock based on three Buys, seven Holds and four Sells assigned in the past three months, as indicated by the graphic below. After a 7.38% loss in its share price over the past year, the average PARA price target of $12.55 per share implies 13.47% upside potential.
