Are Super Bundles the Future of Subscription-Based Streaming?

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Churn is an unavoidable fact of life for streaming services, and much of the strategic thinking that goes into trying to make SVOD profitable focuses on how to minimise its impact, whether by offering more content, incorporating ad tiers, or entering into various bundling scenarios. So what’s working in 2024 and what isn’t? Five leading M & E analysts, Evan Shapiro, CEO, ESHAP, Paul Erickson, Founder and Principal, Erickson Strategy & Insights, Ophelie Boucaud, Senior Analyst, Dataxis, Alan Wolk, Co-Founder/Lead Analyst, TVREV, and Jon Giegengack, Principal and Founder, Hub Entertainment Research, discuss current strategies to ward off churn-pocalypse in this clip from Streaming Media Connect 2024.

Shapiro says, “Outside of Netflix, the churn apocalypse is really the existential crisis.” Regarding the types of bundles that may help solve the churn issues, he says, “There are interesting bundles and then there are less interesting bundles. There's a kind of bundle amongst frenemies, right? The streamers themselves. But then you look at the Verizon bundle with Netflix and Max…that feels like a more protective shell than just a bunch of video services ganging up together.”

Erickson argues that service providers should see themselves as more than just cable TV or broadband providers but as providers of connectivity and convenience. “Maybe billing and subscription aggregation with a little bit of revenue share is a way in which they're a conduit,” he says. “They don't have to deliver your TV. They're your gateway to consuming whatever you want. They also may provide the broadband connection over which you consume all that stuff, but they're happy to let you have one bill and one consolidated relationship.”

Shapiro notes that this model is the core success of Amazon Prime. He says this business approach will be table stakes for most players going forward.

Boucaud discusses some of the recent major bundlings in the European market, driven in particular by ad tiers. “For example, we've had an offer from myCANAL in France, which was really discounted during Christmas time,” she says. “I think it was 25 euros to get Netflix, Disney Plus, DAZN, including Canal as well, which is the premium entertainment hub. So I think the promotion was six months, but still, the price is really, really low for such a huge amount of things, and that's only because they can sort of gain traction from the at tier and take down the prices thanks to that. So that's quite interesting.”

Wolk says that while providers no longer make money off pay TV, whatever type of bundle they can offer now – whether traditional pay TV or streaming – does not matter as long as they can make money. “It's all the same to them,” he says. He mentions the transformative Charter and Disney settlement as a type of compromise.

Still, Shapiro says, “They shed a decent number of subscribers, I think, above the norm as a result of that, and they're not going to come back.” He speculates on the potential of Xumo to gain a competitive advantage over Prime due to its reach and the value demographics of its users. “You're talking about 60 million broadband homes in the United States, the most valuable consumer homes probably on Earth and in all main markets,” he says. “It does feel like they have an opportunity to bundle a television set with a suite of services. That feels like a competitive advantage that very few people other than an Amazon Prime have in the US right now.”

Giegengack outlines some of the issues that Hub Entertainment Research has found for consumers when they deal with bundling. “One of them is cost, but the other, which is just as big, is just their ability to use it all,” he says, “So, complexity. There are just as many people who say, ‘I don't add another streaming subscription because I can't afford it.’ There are just as many people who say, ‘I don't add one because I just wouldn't be able to use it.’ Or it's too complicated to manage all these individual relationships. I think what both of you guys have just said is exactly right: that the pay TV companies have this huge opportunity to aggregate lots of different things together,” including cloud gaming.

He mentions Verizon +play as a good example of a successful bundling/aggregation business. “There isn't actually any content at all associated with that,” he says. “All they're doing is making it easier for you to use all the subscriptions that you already have in one place. And just that process of simplification is valuable enough that in our surveys, many people say that they would be willing to pay for something like that, even though it doesn't come with any content itself. We did one survey where there were people who said they would pay more for a smaller bundle of TV networks if it was just the networks that they use.”

See videos of the full program from Streaming Media Connect February 2024 here.

We'll be back in person for Streaming Media NYC May 20-22, 2024. More details here.

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