WSJ News Exclusive | Paramount Considers Discontinuing Showtime Streaming Service, Merging With Paramount+

It is becoming more difficult for smaller streaming services such as Showtime to compete in a sector full of options for consumers, from established players such as

Netflix Inc.

and

Amazon.com Inc.

to newer entrants such as NBCUniversal’s Peacock and Paramount+.

Across the industry, companies are looking for how to improve their pitch to consumers—from bundling to pricing to examining which products should survive in the marketplace.

Warner Bros. Discovery

WBD -2.70%

has said it would combine its Discovery+ service with its flagship product, HBO Max. Last month,

Walmart Inc.

said it would offer Paramount+ free to subscribers of its Walmart+ membership program.

“We are always exploring options to maximize the value of our content investment by giving consumers access to great Paramount content through an array of services and platforms,” a Paramount Global spokesman said.

For Paramount, combining the two streaming services may require complex negotiations with cable and satellite TV providers who carry the Showtime TV channel. Paramount has broached the idea of closing the stand-alone Showtime service in conversations with at least one major pay-TV partner, some of the people said.

Paramount+ added 3.7 million subscribers globally in the quarter that ended June 30. The company’s other streaming services, which include Showtime, BET+ and its Noggin children’s streaming app, lost 2.4 million subscribers. Including users in Russia, where the company has suspended services, Paramount+ subscriptions would have increased by 4.9 million globally, while additions for the other services would have been 300,000. The company doesn’t disclose Showtime’s subscription figures.

Paramount Global has already moved to bring its two streaming services closer together, while continuing to maintain separate apps for each. Last month, the company began selling them in a packaged bundle at discounted prices—$7.99 a month with ads and $12.99 a month without ads. That offer goes through Oct. 2, after which the prices increase.

In some international markets, Showtime content already appears within Paramount+. But in the U.S. the company has kept the seven-year-old Showtime streaming service separate from Paramount+, which it launched in March 2021, because of the nature of Showtime’s agreements with cable and satellite TV providers.

Paramount executives are discussing the incentives they could offer cable and satellite companies to allow Showtime to be folded into Paramount+, the people familiar with the situation said.

Combining the two streaming services could also help Paramount Global reduce technology and overhead costs at a time of economic uncertainty. Just a few weeks ago, the company started requiring all managers to get approval from its chief financial officer and chief people officer for any new hires, according to people familiar with the situation.