As streamers alike look to bundles in various forms as a tool to gain and keep subscribers, Disney and Warner Bros. Discovery appear to have made a wise choice to pool their respective SVOD services Disney+, Hulu and Max together at a discounted rate, as new early data from Antenna finds the combination drove signups and garnered enviable retention rates.
The firm’s latest SVOD report shows the trio offering not only drove a notable share of signups for each service in the last two quarters of 2024 but also proved sticky during its early months in market – outpacing the 3-month retention of new sign-ups between July-September 2024 for each standalone service, Disney’s own bundle offerings, and even that of SVOD heavyweight Netflix.
Disney and WBD debuted the bundle in the U.S. in July 2024, priced at $16.99 per month with ads or $29.99 per month for the ad-free version, significantly lower than purchasing the three services individually.
As first reported by The Wall Street Journal, Antenna’s State of Subscriptions Report on U.S. premium SVODs found that about 80% of new subscribers who signed up for the Disney-WBD bundle between July 2024 and September 2024 were still subscribed three months later. Per the report, that makes the Disney-WBD bundle the highest retention streaming offering in the market – including better than Netflix’s standalone so-called subscriber survival rate of 74%, (meaning percentage of new signups between July-September that were still subscribed three months later) for the same period.
It’s also better than Disney’s own bundle offerings, which retained 73% of new signups over the same period and include the Disney Duo of Disney+ and Hulu and the Disney Trio of Disney+, ESPN+ and Hulu. And it’s significantly higher than retention at three months of signups during the period for any of the bundle’s individual services, which stood at 56% for each Hulu and Disney+ and 54% for Max.
“Bundles generally show strong retention, and the Disney & Max bundle is showing extraordinarily high loyalty,” wrote Antenna in its report.
As streamers look to tackle the industry issue of churn, there’s been experimentation with bundling, including pairing among different services and from different providers. Netflix, for one, has stayed away from offering inter-company bundles but is included alongside other SVODs in offerings from telcos. For example, the SVOD is part of the StreamSaver bundle from Comcast that offers Apple TV+, Netflix and Peacock to Xfinity customers for $15 per month and has been part of a Max-Netflix bundle offered by Verizon to wireless customers. Charter has also become a prolific bundler of SVOD apps included with its pay TV packages. Note, Antenna’s report covers nine services in the premium SVOD category and doesn’t include data for SVODs or bundles that are distributed by MVPDs or telcos.
Disney and WBD represent an inter-company bundle, where it’s two providers of DTC services and media companies pairing up directly rather than bringing in a third-party distributor like a telco, or one company combining its own separate offerings at a discount (like the Disney Duo and Trio bundles) to create a bundle.
As noted by Antenna, part of the rationale has been that bundles can help reduce churn. To that point, speaking last May during Q1 earnings about benefits of the Disney+-Hulu-Max bundle, WBD CEO David Zaslav noted there is modest content overlap across the services, citing the potential to drive incremental subscriber growth and expectations to “increase retention and lower churn,” therefore supporting higher lifetime value of subscribers. And Antenna’s early results suggest the effort by Disney and WBD appear to be working. Not only are customers staying, but the bundle appears to be attracting them as well. In total, subscriptions to the Disney-WBD bundle reached 2.2 million by the end of 2024, per Antenna.
“Many inter-company bundles have struggled to gain traction, but the Disney & Max bundle is accounting for a significant portion of sign-ups for all the services included in the package,” wrote the research and analytics firm.
It appears to be helping subscriber acquisition for WBD in particular, with about one in five Max U.S. sign-ups opting for the bundle in the last two quarters of 2024. More specifically, the Disney-WBD bundle accounted for 22% of Max sign-ups in Q3 2024 and held steady at 21% in Q4.
In Q3 WBD reported adding about 200,000 subscribers in the U.S. and Canada across its direct-to-consumer services (which also includes Discovery+), for a total domestic base of 52.6 million. The company reports Q4 and full-year 2024 earnings this Thursday, February 27.
Speaking on Q3 earnings in November, WBD’s Zaslav commented positively on the bundle partnership with Disney, citing “a lot of strength.” And while early, the chief executive said at the time that “subscriber growth is significant and the consumer satisfaction is quite high,” of the bundle that launched last summer.
As for Disney, the bundle with Max accounted for 14% of Disney+ signups and 15% for Hulu in the U.S. in Q3, per Antenna data, although the proportion of signups driven by the bundle declined to 10% for each of those services in Q4.
Antenna’s report also suggested some good news for the broader premium SVOD industry on the issue of churn – which, after increasing for 19 of the 21 previous months, declined year-over year in each of the final three months of 2024. The firm said this signals potential churn stabilization, with a category weighted average gross churn rate of 5% at the end of 2024.
And when taking into account subscribers who canceled and then returned to a service, the average net monthly churn rate across the premium SVOD category in 2024 was less than 3%
However, that’s not to say churn is no longer an issue. With it’s easy sign-up, easy-cancel nature, and services that potentially lend themselves to some consumers’ content-chasing (and possibly wallet-conscious) tendencies, a notable proportion of subscribers (32%) leave and then return to a given platform within one year.
In part, the report highlights how streaming services must grapple with some levels of volatility among their bases and employ more sophisticated subscriber management tactics as they deal with high levels of both cancels and resubscribes.
For example, Antenna’s data shows that while the number of gross ads for premium SVODs increased 11.6% yoy to 174.3 million in 2024, subscription cancels grew by 15.8% yoy to 147.8 million. Meaning the growth in SVOD cancels outpaced gross adds, resulting in 26.5 million net adds in 2024, so while still growth a 7.1% decline from 2023.
But while subscription cancels increased, as mentioned, many come back to a service within a year. Antenna said these 12-month resubscribers are a growing portion of overall SVOD subscriber acquisition – representing nearly one-third of gross adds in 2024, up one percentage point from 2023 and up five points from 2022.
And despite more cancelations, premium SVODs see a large proportion of subscribers return to the same service.
Of those who canceled in 2023, a quarter resubscribed to the same SVOD within three months, 34% returned within six months and 45% came back within one year.
Bringing in those who resubscribe, the report found average monthly net churn at the end of 2024 was 2.8%. According to Antenna, “Net Churn provides a clearer view on the category’s retention” than gross churn as it takes into account the high number of those who resubscribe to streaming services they’ve canceled.
Churn isn’t the only issue for streamers, where streaming profitability has taken on emphasis for many over straight subscriber counts – which some, including Disney and WBD, achieved in quarters of calendar 2024 (note WBD reports Q4 and full-year earnings later this week).
And as Antenna noted in its recap of 2024, “Industry reports question whether this new [SVOD] model can be as lucrative for media companies as the linear Pay TV model; that is a critical issue, for sure. But reaching profitability is an important milestone nonetheless, and the industry has successes across numerous key business areas from which to build.”
Antenna’s report covers nine streaming services in the “premium SVOD” category, including Apple TV+, Discovery+, Disney+, Hulu, Max, Netflix, Paramount+, Peacock and Starz.