Warner Bros. Discovery may not have locked up NBA rights this week – but it has a new bundle with Disney that debuted Thursday.
A bundle of WBD’s Max and Disney’s Hulu and Disney+ officially launched in the U.S., putting price points to the previously announced trio of services that come together in both ad-supported and ad-free versions. The bundle is priced at $16.99 per month with ads while the ad-free version is $29.99 per month – promising up to 38% savings compared to purchasing the services individually.
On its own, WBD’s Max costs $9.99 per month with ads and $16.99 per month for its lowest-cost ad-free plan (following a $1 price bump last month). Hulu and Disney+ are already offered as a duo bundle from Disney at a price of $9.99 with ads and $19.99 ad-free. Speaking during Q1 earnings about the Disney-WBD bundle, WBD’s JB Perrette said the partners were working to price the bundle “very attractively” compared to the cost of a standalone Max and the price of the existing Hulu-Disney+ bundle. The new WBD-Disney bundle is about $3 cheaper per month than buying standalone Max and the Hulu-Disney+ combo with ads and about a $7 per month comparative discount for the ad-free bundle.
The trio bundle – which brings together entertainment brands such as ABC, CNN, DC, Discovery, Disney, Food Network, FX, HBO, HGTV, Marvel, Pixar, Star Wars, Searchlight, and Warner Bros., among others – is available for purchase direct-to-consumer from any of the three streaming platforms’ websites.
The companies are also launching a concerted, cross-platform national marketing campaign starting today, which features each streamer’s collection of popular TV series, films and characters. According to the companies, the campaign includes “a robust blitz” of omnichannel marketing including national broadcast, social, digital and O&O channels.
When the media companies first disclosed plans to team up together on a bundle of their competing services, WBD executives suggested it’s aiming to fulfill consumers viewing needs and has enough breadth of content to be considered a “must-have” TV subscription on par with a Netflix or Prime Video.
“Our bundle plus one or two of those other services… I think can make up the entertainment experience for most consumers very happily,” Perrette said in May. “We do think this package can be an anchor tenant of every household’s entertainment experience and we don’t think there’s a need at this point for anything more to it.”
WBD CEO David Zaslav during Q1 earnings cited modest content overlap among the three services as presenting opportunity for incremental subscriber growth. WBD execs at the time also noted expectations for the bundle to help increase retention and lower churn, in turn supporting higher lifetime value of subscribers, alongside ARPU benefits. And by working together the companies anticipate marketing efficiencies as the bundle gains adoption.
The companies are also taking a direct-to-consumer route in offering services together, cutting out the middleman, where Zaslav in May noted better ARPU and business benefits of doing it themselves rather than through an aggregator or platform provider.
It’s a different approach to bundling than some, such as Netflix, which in its Q2 earnings letter to shareholders last week explicitly said it hasn’t bundled directly with other streamers like Disney+ or Max “because Netflix already operates as a go-to destination” due to its wide content slate and product experience. The letter went on to suggest that it’s other streamers that need Netflix in a bundle rather than the other way around, where teaming up with competing services has limited benefits for the SVOD giant as it already enjoys high penetration, engagement and retention.
In the name of making Netflix easy to find and use, it is however, willing to be bundled alongside other streamers in offers provided by operator partners alongside their other services – such as the recent $15 per month StreamSaver bundle of Netflix, Apple TV+ and Peacock from Comcast and an earlier offer of Netflix and Max for $10 per month from Verizon.
But discounted bundles of streaming services could be attractive as consumers clamp down on their number of services and SVOD spending. According to Parks Associates research, U.S. households that had five or more OTT subscriptions declined from 52% in Q3 2023 to 46% in Q1 2024 and average monthly spending on SVOD services dropped from $73 to $63 during the same period. How much of that spending decline is a result of consumers turning to cheaper or free ad-supported streaming options wasn’t immediately clear.
And as streamers continue to raise prices and consumers keep an eye on wallets, others have noted the importance of being included in bundles – namely incoming leadership at Paramount as part of a pending acquisition by Skyworks Media.
During a call for investors discussing the merger deal, former NBCU exec and incoming president Jeff Shell said the company wants to lead in DTC streaming, where it’s exploring all options including partnering with competing services.
“To be a winner in DTC really means being in the ultimate bundle that’s coming,” Shell said earlier this month, although what shape that eventually takes remains to be seen.