To Bundle or Not to Bundle: Why That Is No Longer the Question – Rolling Stone
Share on facebook

To Bundle or Not to Bundle: Why That Is No Longer the Question – Rolling Stone

By Ian Morris
Bundling multiple products or services together is nothing new. Whether it’s the option package on your car or the value meal you get at the drive-through, bundling is evident in our most common purchase decisions. 
This is not surprising. Not only do bundles often allow companies to capture more revenue per customer (do you want fries with that?), but they also reduce cognitive load, which is just geek-speak for providing consumers with so many choices that decision-making is slowed, or worse, the purchasing process is abandoned altogether.
The entertainment industry is certainly no stranger to bundling, and cable television has arguably benefited more from bundling than any segment of the industry. Consumers are all too familiar with choosing between channel packages featuring names like basic, select, premier and platinum even before the concept was broadened to include additional services like internet access, phone service and home security.

blogherads.adq.push(function () {
.defineSlot( ‘medrec’, ‘gpt-dsk-tab-article-inbody1-uid0’ )
.setTargeting( ‘pos’, [“mid-article”,”mid”,”in-article1″,”mid-article1″,”inbody”,”inbody1″] )

Of course, most people don’t question the need for bundling when choosing a cable TV package. Bundling could become just as relevant in today’s entertainment world, but currently, it is still in its infancy. Today, entertainment is all about streaming. In fact, according to the latest data from Nielson, in July 2022, streaming eclipsed cable as the No. 1 way people consume content.

So how does all this apply to streaming? Coincidentally, as streaming has taken off, so has bundling, albeit in some very different forms in this new and rapidly evolving industry.  
Recently, Warner Bros. Discovery made headlines when it announced its intention to merge its HBO Max and Discovery Plus streaming services into a single service. Whether the merging of these two very different services — one of which is arguably already a bundle of its own — bodes well for their future success remains to be seen. Regardless, the streaming service made it clear that this is a long-term goal, with the first step being (you guessed it) a bundle that allows consumers to purchase both services at a reduced price. 
This near-term bundling strategy could likely resemble Disney’s current approach. While Disney continues to market its three differentiated streaming services, Disney+, Hulu and ESPN+, as its own separately branded services, it’s now offering consumers a subscription to all three for a discounted rate. During the second quarter, Disney reported growth in all three of these services, resulting in the company becoming the global streaming leader in subscribers, besting Netflix for the first time. 
The Rolling Stone Culture Council is an invitation-only community for Influencers, Innovators and Creatives. Do I qualify?
While it may seem like Disney and Warner Bros. are leading the charge into bundled streaming, making that assumption would be missing the larger point. Two other leading services, Amazon’s Prime Video and Apple’s Apple TV+, began their lives as part of broader bundling strategies brought to you by two of the world’s most valuable and formidable companies.  
For the former, Prime Video is just another reason for more than 200 million consumers to keep paying Amazon $139 a year to maintain their Prime membership. When tens of billions of dollars in high-margin subscription revenue are at stake, it can be easy to justify spending a few billion here and there for broadcast rights to NFL, NBA and MLB games or, let’s say, a new Lord of the Rings series.

blogherads.adq.push(function () {
.defineSlot( ‘medrec’, ‘gpt-dsk-tab-article-inbody2-uid1’ )
.setTargeting( ‘pos’, [“mid-article2″,”mid”,”in-article2″,”mid-article”,”inbody”,”inbody2″] )

Similarly, Apple has been making big bets of its own, which also include live sports and plenty of original shows and movies. But these bets appear to be part of Apple’s broader strategy to build the massive services business it has promised Wall Street, a business that already spans everything from TV to music, games, news, fitness and cloud storage. All of this can be purchased (you guessed it…again) as a single bundle known as Apple One. The fact that Apple and Amazon’s streaming services are just one piece of much broader consumer strategies enables these behemoths to make big bets in streaming without assuming the same risks as their entertainment-only focused competitors. 
What of the other streamers? Well, that remains to be seen. Peacock is owned by Comcast and, as a result, seems part of some broader bundling strategies tied to the media giant’s other businesses. Paramount Global, which resulted from the re-marriage of CBS and Viacom, owns both Paramount+ and Showtime and offers a bundle of those services. But in the case of both companies, broader bundles or further industry consolidation may be needed in order to gain the scale required for success in this complex and highly-competitive capital-intensive business.
Then, of course, there is Netflix. While Netflix has started including some games as part of its subscription, it is still a single -service and a single-brand company — an approach that until recently has gone unquestioned due to its historically strong growth and streaming leadership. But now, with growth stalled and other subscription behemoths making progress in the space they created, industry observers are eager to see whether Netflix will become a driver of further consolidation or possibly even get folded into another company’s broader media ambitions.
One way or another, the consumer-streaming industry will likely continue to be a dynamic and tumultuous space for years to come. Those changes could define how these services are offered to consumers. How many of these changes will be the result of commercial partnerships versus broader corporate consolidations remains to be seen, but some further consolidation is a fair bet.

blogherads.adq.push(function () {
.defineSlot( ‘medrec’, ‘gpt-dsk-tab-inbodyX-uid2’ )
.setTargeting( ‘pos’, [“mid”,”mid-articleX”,”in-articleX”,”mid-article”,”inbody”,”inbodyX”] )

Regardless of what form this consolidation takes, consumers will likely be choosing from a smaller group of large bundles to serve as the core of their streaming experience, while still maintaining the ability to add on some niche services from other smaller providers if they see fit. This outcome, which may sound very familiar to anyone who has ever gotten their TV signal via a cord from their wall, could be beneficial for all involved.
We want to hear it. Send us a tip using our anonymous form.
Copyright © 2022 Penske Business Media, LLC. All Rights reserved.



NASCAR Awards 2022: How to watch, stream, preview for the year-end champion's banquet – CBS Sports

Will the recession change Big Tech’s view of music & entertainment? [Mark Mulligan] –

Most Viewed