The TV bundle is poised to make a big comeback in the streaming era

By CNN Newsource

Published December 6, 2023 4:14 am

By Oliver Darcy, CNN

(CNN) — The bundle is staging a comeback.

After spending billions of dollars to launch their own direct-to-consumer streaming platforms, the world’s biggest entertainment companies are slowly getting back together, giving consumers a break on soaring prices by pushing them to their more lucrative ad-supported tiers with the hope that the more attractive offers will keep them from axing their services.

Verizon this week launched a new streaming subscription for its wireless phone customers, pairing Netflix and Max’s ad-supported tiers together for $10 a month — a more than 40% savings on the price of the individual services. For an additional $10, Verizon said it will also throw in Disney+, Hulu, and ESPN+. All told, for just $20 a month, the company’s customers can now get five streaming services for the price of a single tier of Netflix.

“Verizon is using its strategic relationships with the biggest players in the content industry to continue to unlock more value for its wireless customers,” the company said in a statement boasting of the deal.

The announcement comes just days after The WSJ’s Jessica Toonkel reported that Apple and Paramount are also discussing a partnership to offer a discounted pairing of their streaming services, Apple TV+ and Paramount+. Both services, with their sizable, yet smaller, libraries have had a more difficult time breaking through in the competitive streaming climate.

Disney, which has offered its own bundle of Disney+, Hulu and ESPN+ — its three direct-to-consumer streaming services — at a reduced price, has also continued to merge the platforms closer together. The House of Mouse will soon launch a combined Disney+ and Hulu app, melding the two platforms’ libraries in a single app.

“This is a logical progression of our (direct-to-consumer) offerings that will provide greater opportunities for advertisers while giving bundles of subscribers access to more robust and streamlined content,” Disney chief Bob Iger explained earlier this year.

If you squint hard enough, it all starts to resemble the television bundle that was once an entertainment essential, but eventually became so overwrought with niche channels and high prices that consumers began to cut the cord.

David Zaslav, the chief executive of Warner Bros. Discovery, CNN’s parent company, has been open with his belief that the bundle is set to make a return in the streaming era, noting that the current experience consumers face as they try to locate their favorite programming on a dizzying number of apps is far from ideal.

“As we talk to consumers, they find it difficult, and so I think one of the things that we’re going to see as we look into the future is bundling,” Zaslav said.

Warner Bros. Discovery’s Max platform itself is already a bundle of previously smaller services, mashing up HBO Max with the Discovery+ portfolio. In recent months, Max has also launched a new 24/7 live news channel from CNN and added a live sports tier, two major attractions that were previously only found on cable lineups.

Consumers have seen the price of streaming services soar this year, with the monthly cost of nearly all the major platforms increasing by double-digit percentages. The most expensive tier of Netflix, which includes ad-free programming and 4K-resolution, is now $22.99 a month. The similar ad-free tier for Max is now $19.99 a month.

While bundling services together could benefit consumers hoping to lower the price of streaming services, entertainment companies are hoping it also stems the bleeding of consumers canceling their subscriptions, a process made far easier in the direct-to-consumer content age. The research firm Antenna said the cancelation of streaming services reached an all-time high in October, hitting 5.7%.

By bundling up, streamers are hoping to reduce those cancelations in exchange for offering larger content libraries at a discount on its ad-supported tiers. At the moment, some consumers subscribe to various services to binge certain shows, then unsubscribe after consuming it. Media companies need to do something to stop that bleeding.

As Zaslav said at a conference in May, the independent, walled-off models that have existed over the last several years are “not really sustainable because it’s not a good consumer experience” and “because there are a lot of people in this business that are just losing too much money.”