June 24 (Reuters) - Paramount Global is raising subscription rates for its flagship streaming services, the media giant said on Monday, as it looks to recalibrate its business and pay off debt.

The revision in pricing comes at a time when merger talks between Non-Executive Chairwoman Shari Redstone and David Ellison's Skydance Media for a potential sale of Redstone's controlling stake in Paramount Global to the independent studio have failed, according to sources.

The Paramount+ with Showtime plan will cost $12.99 a month, with a hike of $1, effective Aug. 20 for new users and Sept. 20 for existing customers.

The Paramount+ Essential subscription rate will increase by $2, to $7.99 a month for new subscribers, effective Aug. 20. However, current users of the plan will continue to pay $5.99 per month.

The subscription price of the limited Paramount+ commercial option will increase by $1, to $7.99 for current customers from Sept. 20.

Paramount co-CEOs told employees earlier in June that the company will focus on transforming its streaming business, reducing costs and divesting some assets to help pay its debts, according to an email seen by Reuters.

An exit by advertisers and cord-cutting have hammered Paramount's traditional TV business, which accounts for more than half its revenue.

Its streaming service, which is smaller than its rivals', has more than 71 million subscribers, compared with Netflix's 269.60 million.

Comcast's Peacock streaming service also announced a rate revision in April for its premium and premium-plus plans.

Warner Bros Discovery is also looking to raise prices for its Max streaming platform, Bloomberg News reported in May. (Reporting by Harshita Mary Varghese; Editing by Mohammed Safi Shamsi and Pooja Desai)