How Long Will Streaming Bundles’ Popularity Last?
By Movieguide® Contributor
Streaming bundles have been on the rise, and some believe they might be the answer to the entertainment industry’s growth, but a new study seems to say otherwise.
“Consumers like bundles, especially if they’re getting a price break. Media companies like bundles because they help reduce churn (i.e., cancellation rates) and lower customer-acquisition costs, even it means working with would-be rivals,” Variety said of why bundles are so popular right now.
However, a study conducted by Omdia reveals that by 2029, the projected number of streaming bundle customers will be around 540 million. Although that number sounds huge, it’s not far off from where the industry sits today at 365 million.
“In the United States, bundles account for 17% of all streaming subscriptions, and that number is only expected to rise to 21% in the next five years,” The Streamable said.
“Consumer research reveals worrying levels of frustration with modern streaming services,” said Tony Gunnarsson, principal analyst of Omdia. “There are too many options, yet customers struggle to find the right content. The global TV and video industry has collectively failed to create a common platform that allows customers to access multiple streaming services in one bundle with a single monthly bill. Historically, this is the role that pay TV served. However, with the rise of Netflix and Amazon along with other popular streaming services such as Disney+, Max, or Paramount+, customers face a hopelessly fragmented entertainment marketplace.”
Movieguide® previously reported on why bundles’ popularity seems to be booming:
Previously, bundles were all but void in the streaming world because simply providing a discounted price made no sense. Oftentimes, these bundles would be offered by third-party companies — like cell phone companies — who would cover the difference in the normal price. This changed when streaming services began to introduce ad-supported viewing last year, creating a second revenue stream that occurred after the monthly fee.
This second source of income has allowed services to offer their platform at a lower price without taking a significant cut in revenue. In fact, bundles have arguably led to an increase in revenue as they significantly reduce consumer churn.
For many, bundling services seems to make sense. The Disney+/Hulu/ESPN+ bundle, for example, gets customers everything from Marvel movies to MONDAY NIGHT FOOTBALL.
But will it work in the long run to keep viewers glued to their screens and increase profits for streamers?
“It’s hard to see in the long term how the bundles will appeal to a large enough number of people that it will make a material difference to the bottom line,” said Colin Dixon, founder of independent analyst firm nScreenMedia.
