Streaming Bundles Predicted to Lower Consumer Churn
By Movieguide® Contributor
New survey data reveals that consumers are significantly more likely to stick with streaming services if they are included with a bundle.
The survey found that consumer churn could be reduced by as much as 28% depending on the service. The streamers most poised to benefit from bundles are those who provide high-quality content but offer a smaller library such as Apple TV+ or Crunchy Roll.
The tendency for bundles to result in reduced churn is a win for consumers as it will motivate streamers to consider offering these deals, even when it means partnering with their competitors. Comcast now offers a bundle featuring Peacock, Netflix and Apple TV+ for only $15 per month, while Disney and Warner Bros. are expected to announce a new bundle later this summer.
Bundles have become a necessity in the industry as consumers grow tired of the continuous price hikes that have occurred in recent years. Since 2022, most major streaming services have raised their prices at least once per year, if not more, resulting in costs that have caused consumers to reconsider their subscriptions. Even with the introduction of cheaper, ad-supported tiers, many consumers have begun cutting out the subscriptions they find themselves using infrequently.
To stem the rising costs and keep subscribers happy, streamers have also started considering licensing content to boost library offerings while avoiding the cost of producing a show from scratch.
“’The next chapter could see frenemies joining forces in the name of simplifying the experience for consumers while also reining in costs. ‘If we don’t do it to ourselves, I think it will be done to us,’ Warner Bros. Discovery CEO David Zaslav said at a recent Wall Street conference. ‘It will be Amazon who does it, or Apple who does it, or Roku who does it. They’ve already started,’” Deadline wrote last December.
While consumers have been shouldering the brunt of making streaming profitable, it appears the tide may finally be turning as services find creative ways to boost cash flow while offering a better experience for subscribers.
Movieguide® previously reported:
While the price for streaming services has ballooned in recent years, consumers may soon find reprieve through subscription bundles that heavily discount costs.
Verizon recently launched a subscription bundle for the ad-tier version of Netflix and Max priced at $10 per month, discounting $7 per month from the non-bundled price of each service. This deal is groundbreaking, as Netflix has long shied away from offering any discount on its standard pricing.
As streaming services have added ad-free and ad-supported subscription tiers, discounts like this are possible and open the door to similar deals in the future. Through the ad-tier level, Netflix makes more money the more people use the site rather than receiving a flat payment regardless of a user’s watch time.
Netflix executives say the basic ad tier makes the company more money per customer than its base ad-free tier.
Because the streaming service can rely on ads to generate revenue, the company can discount the actual subscription cost without taking a major loss in revenue.
As ad-level tiers become popular and streaming services crack down on password sharing to increase profits, the stage is now set for streaming bundles – at the ad-free tier – to appear in abundance.
