Soon you can subscribe to many streamers at once for $40 — but there’s a catch
An analyst calls the $40 bundle an “evolution” — or is it devolution?
Been curious about niche streamers but couldn’t justify the expense? Good news: Soon you can get your Netflix with a side of, say, BritBox. Perhaps less exciting: Streaming bundles will be discounted, not cheap, and they may not make it easy to get exactly what you want.
Netflix paired with Max streaming bundle for select Verizon customers at $10 per month, but the real future of streaming will cost four times that and include several more services, Magid analytics executive VP Tony Cardinale told IndieWire.
Strategy and consulting firm Magid has been around almost as long as TV itself. (In 1957, ABC was eight years old.) It’s used to seeing theoreticals become real, like cable and the internet. Up next is the streaming bundle, which Cardinale expects to run around $40 and will arrive in the next 12-18 months.
For the middle of the country, where linear television is alive and well, that bundle cost could be $100 with the addition of YouTube TV, Fubo, or Hulu’s Live TV service. “A lot of the world still watches HGTV or Food Network, CNN, MSNBC, or Fox News,” Cardinale said.
A $40 bundle will likely be centered around two or more “motherships” — Netflix, Amazon Prime Video, Hulu, Disney+, and Max. Sprinkle in some “specialty services” with “passionate audiences” and voila: “a product that’s viewed as a value for $40.”
That will mean accepting a prefab future rather than a la carte, which Cardinale views as the cost of doing business. “[It’s a] fallacy of people not being willing to pay for channels and shows they don’t watch,” Cardinale said. “There’s no such thing as that. There’s no business model that could be successful that way.”
The future suddenly looks a lot like cable television? It does: The platform is newer, but the old-fashioned cable business model promises better returns. Of course, it was customers’ demand for choice that broke cable in the first place; Cardinale said the market will need to dial back that demand and “evolve” to something in the middle.
Perhaps it’s more like we have to devolve.
The bundlers likely will be tech companies with an existing subscriber base. Verizon is already in the game; maybe Roku steps up next. Cardinale sees a choice between ad-supported and ad-free tiers; by this hypothetical point on the streaming-industry timeline, only Apple TV+ will not have an ad-supported tier. Or maybe it will.
he clear advantage to the end user is savings. Netflix/Max on Verizon represents a 41 percent discount. The Duo Disney bundle of Disney+ and Hulu is 37 percent; Trio (Duo plus ESPN+) is 41-44 percent.
Niche streamers would gain scale in bundles, creating more exposure and all-new Venn Diagrams. A hypothetical bundle with Netflix, BritBox, and BET+ wouldn’t have a ton of natural subscriber overlap, but it would let streamers monetize multiple new demographics.
With about 250 million global paid subscribers, Netflix doesn’t need to expand its addressable market — but a bundle could help reduce churn. Antenna data in June found that the Disney+ churn rate was 4 percent, Hulu’s was 5 percent, and ESPN+ was just over 7 percent. However, the churn rate for the Disney Trio bundle — which includes all of those products — was just 2 percent. By comparison, the Netflix rate is 3.3 percent and the industry average is 7 percent.
Cardinale’s vision of the bundle may find even lower churn rates. Dropping out wouldn’t cancel one, two, or even three services — it would mean “pausing five,” he said, which is much more of a “dramatic sacrifice.”
