Decades ago, as “community antenna TV” started to transform into a more sophisticated business that went beyond the retransmission of broadcast signals, one principle made it all work: The bundle.
Of course, streaming disrupted that paradigm as cord cutting sliced the traditional TV universe in half over the last decade, but then consumers got confused. Really confused. Fast forward to today, and the bundle is back, with the industry trying to give consumers the choice they’ve always wanted while constructing packages that emulate a model that worked for decades. Both traditional media companies and pure-play streamers also want to boost engagement, reduce churn, and find sustained profitability by joining forces – sometimes even with competitors.
These new bundles are different, and it will take a lot of blood, sweat, and tears to fully satisfy fickle consumers. But the ultimate reward could be new models that leverage modern technology, new consumer habits, and powerful intellectual property to achieve massive profitability through partnerships driven by metadata, AI-powered search and discovery, and hyper-personalized recommendations.
Bundles are a multi-faceted bargain of sorts: For consumers, they offer convenience and lower prices as a reward for buying in volume. For content owners, bundles offer stability and more sustained cash flow as it becomes harder for consumers to constantly churn out of services. It’s a delicate dance, and this gala has just begun.
In One Touch Intelligence’s new “The Bundle Bargain” DEEPDive report, we examine why the industry has returned to the bundle mindset, as well as the varied strategies among players with various leverage over one another. It’s a fascinating landscape that will only get more complicated in the coming years.
Will we see more competitive bundles like the Disney+, Hulu, and Max combo that offers a 35% discount over buying those services separately? Will more MVPDs adopt Charter’s aggressive carriage negotiating stance to secure its premium video customers free access to streaming services like Disney+ and Paramount+? Will Comcast’s May announcement of the StreamSaver bundle combining the ad-supported tiers of Peacock and Netflix with Apple TV+ at a hefty 40% discount inspire others to create similar packages? Check out the table at the end of this article comparing different bundle offers currently in the market.
Internal bundles
Meanwhile, companies are also starting to create “internal bundles” that leverage wider corporate assets.
For example, Hallmark Media in mid-September will convert Hallmark Movies Now into Hallmark+ at $7.99 per month (or $79.99 per year), including $5-per-month Gold Crown Store retail coupons, free unlimited eCards, shopping rewards, and various “surprise gifts.” Sure, it’s hiking the price by $2 per month, but CEO Mike Perry argues that the benefits amount to $400 per year. Think about the possibilities if Hallmark, Disney, NBCUniversal, and others pooled not just their streaming assets but also benefits around their theme parks, cruises, theatrical movies, and other assets into bespoke bundles for unique slices of consumers.
This could get interesting.
Opportunity for niche streamers
Bundles also create new opportunities for smaller streamers ranging from AMC+ to Britbox to CuriosityStream, all of which could help larger streamers fill gaps in certain genre offerings (horror, British content, factual-based content, etc.).
Just as with the old cable model that helped smaller networks survive and often thrive because they lived within an expanded basic tier that included popular channels like ESPN and USA Network, this kind of bundling could help preserve streaming diversity and avoid an overly consolidated and homogenized streaming universe.
On the other end of the spectrum are dominant players like Netflix, which recently signaled in its Q2 shareholder letter an unwillingness to bundle with competitors “because Netflix already operates as a go-to destination for entertainment… which limits the benefit to Netflix of bundling directly with other streamers.” Must be good to be the king.
The future of bundling
While different companies will take varied approaches, the future of bundling could get even more sophisticated to the point of near science fiction.
Imagine studios and streamers uploading customer data into secure “clean rooms” that churn out super-algorithms for the best content search and discovery across services. While major media companies would certainly be reluctant to share customer data, they may eventually warm to the idea if it benefits everyone fairly and equally. Perhaps consumers could even customize their own master bundles, with clever algorithms dynamically suggesting the best combinations and even dynamically pricing them in real time. Artificial intelligence will soon enable agents that can constantly shift the bundle mix to fit their humans’ moods and changing preferences. It’s wild stuff. But it’s all possible with current and soon-to-launch technology, as long as rival studios and streamers are willing to collaborate in good faith – within the limits of antitrust law, of course.
It worked for cable. Now it’s up to everyone to create a more modern version of an ancient business model. The game is most certainly afoot.
(For more on how bundles are changing and evolving into the future, check out OTI’s “The Bundle Bargain” report here.)
Michael Grebb is Senior Vice President and Lead Analyst for One Touch Intelligence, which provides market intelligence and industry analysis services for leading companies in the media and telecommunications space. The One Touch Intelligence StreamTRAK series is a complimentary service offering industry professionals insights and context around developments in the digital media sphere.
Industry Voices are opinion columns written by outside contributors — often industry experts or analysts — who are invited to the conversation by StreamTV Insider staff. They do not necessarily represent the opinions of StreamTV Insider.