The streaming industry is transforming as heavy-hitters Netflix (NFLX) and Max (WBD) add to the trend of platforms bundling their services — this time in a deal facilitated by Verizon (VZ). Apple (AAPL) and Paramount (PARA) are exploring a similar path too, exploring a joint bundle of their services at a discounted rate.
The Churn Challenge
Why the sudden interest in bundling? Well, the streaming scene is fiercely competitive. Services like Apple TV+ and Paramount+ are dealing with churn challenges because of frequent price hikes. These hikes are part of a broader strategy to achieve profitability, but the risk is losing subscribers who can easily hit the cancel button after binge-watching their favorite shows.
That’s where the bundling magic comes in. It’s not just about making things convenient; it’s a strategy to keep subscribers hooked. Bundled services offer more value in a single package, and according to data from Antenna, they have a lower cancellation rate.
The Bundle Effect
Disney (DIS) is already on the game with a subscription package that includes Disney+, Hulu, and ESPN+. Some platforms also bundle with non-streaming services, such as NBCUniversal’s (CMCSA) Peacock-Instacart (CART) bundle. Not only do these bundles save subscribers some bucks, but they also help streaming companies keep a stable subscriber base in this volatile market.
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