The media industry is preparing for a watershed year in 2024 as streaming bundles become an increasingly attractive business model for media companies. The rise of streaming bundles presents an opportunity for streaming services and cable companies alike, given the deterioration of traditional pay TV and the difficulties encountered by independent streaming providers. Here we’ll take a look at streaming bundles as a trend and see how they might affect the market going forward.
The Charter-Disney Deal and Its Importance
In the buildup to the NFL season, Charter and Disney struck a deal that serves as a prime example of the increasing significance of streaming bundles. Millions of Spectrum subscribers were left without TV because of the fight between Disney-owned channels (including ESPN) and Charter Communications. Spectrum TV Select Plus customers now have access to Disney+ and ESPN+’s ad-supported tiers thanks to an agreement that resolved the dispute.
This was a watershed moment in the relationship between media companies and cable providers, and it could be the beginning of something bigger. Streaming bundles are appealing due to their large subscriber bases and the positive impact on revenue for pay TV and broadband companies. Notable industry figures have voiced their support for streaming services being included in cable bundles, including Liberty Media Chairman John Malone and executives from Paramount and Warner Bros. Discovery.
What Streaming Bundles Are and How They Work
Even though streaming bundles are becoming more popular, big companies have been slow to offer them. Companies should think long and hard about how offering their services at a discounted rate will affect their average revenue per user (ARPU) and subscriber growth. If the number of subscribers increases significantly, it could make up for the loss in ARPU caused by a discounted bundle.
The prospect of streaming bundles eating into media companies’ cable plans is another cause for concern. On the other hand, the industry could finally see some good news with the addition of streaming to pay TV packages. Ad revenue for pay TV has been falling, while cable companies see higher average revenue per user (ARPU) from ad-supported streaming platforms.
Big Companies Are Getting Into Streaming Bundles
Streaming bundles are still in their infancy, but major platforms have taken big steps towards implementing them. One example is how Disney took over Hulu after buying out Comcast’s remaining shares and launched a hybrid platform called Disney+ and Hulu. Disney can now offer a three-way bundle with Disney+, ESPN+, and Hulu thanks to this move.
Reports have also surfaced that other industry heavyweights like Apple and Paramount are contemplating launching their own streaming bundles. A combination of Apple TV+ and Paramount+ is reportedly being considered by Paramount Global and Apple. It has also been speculated that Verizon, a telecom provider, is getting ready to offer a bundle of Netflix and Max, two of its ad-supported tiers, to its customers.
Advantages That Media Companies Could Realize
Streaming bundles have the potential to revolutionize the media industry and bring numerous advantages to media companies. Pay TV providers can use this as a chance to hold on to their subscribers and maybe even increase their prices. Companies such as Disney and Warner Bros. Discovery are able to gain more subscribers by bundling their services and utilizing the extensive content they offer.
More bundling opportunities may also arise as a result of industry mergers and acquisitions. One example is the rumored merger talks between Paramount and Warner Bros. Discovery. Merger talks are in their early stages, but if they progress, the two companies’ content libraries could be combined in a bundled offering.
Views on Streaming Bundles’ Future
Streaming bundles are going to be a big deal in the media industry when things keep changing. As standalone streaming services encounter difficulties and traditional pay TV continues to decline, the idea of bundling becomes more appealing to both the streaming services and the cable providers. The idea behind streaming bundles is to attract more subscribers and make more money by selling a set of services at a discounted price.
But before offering bundles, media companies should think about how it will affect their average revenue per user and whether or not it will eat into their current service offerings. Maximizing the benefits of streaming bundles will require finding the perfect balance between pricing and subscriber growth. More partnerships and bundled offerings are likely on the horizon as the industry is shaped by mergers and acquisitions.
See first source: CNBC
FAQ
Q1: What are streaming bundles in the context of the media industry?
A1: Streaming bundles refer to packages that combine multiple streaming services or channels into a single offering, often at a discounted rate. These bundles aim to provide consumers with a comprehensive entertainment experience.
Q2: Why is the Charter-Disney deal considered important in the context of streaming bundles?
A2: The Charter-Disney deal serves as a significant example of the growing importance of streaming bundles. It resolved a dispute between Disney-owned channels and Charter Communications, allowing Spectrum TV Select Plus customers to access Disney+ and ESPN+’s ad-supported tiers. This agreement highlighted the potential of streaming bundles in the media industry.
Q3: What impact can streaming bundles have on the media market?
A3: Streaming bundles have the potential to reshape the media market by offering consumers more options and convenience. They can benefit both streaming services and cable providers by increasing subscriber bases and revenue.
Q4: How do streaming bundles affect average revenue per user (ARPU) for media companies?
A4: Media companies offering streaming bundles may face a trade-off between lower ARPU due to discounted bundle pricing and increased subscriber growth. The success of such bundles depends on finding the right balance between pricing and growth.
Q5: Which major companies are getting into the streaming bundle space?
A5: Major companies like Disney, Apple, Paramount, and Verizon are exploring or launching streaming bundles. Disney, for example, offers a bundle of Disney+, ESPN+, and Hulu. Apple and Paramount are reportedly considering bundling their services, and Verizon is looking into offering Netflix and Max bundles to its customers.
Q6: What advantages can media companies realize through streaming bundles?
A6: Media companies can benefit from streaming bundles by retaining subscribers, increasing prices, and gaining more subscribers through bundled services. Additionally, industry mergers and acquisitions may create opportunities for expanded bundled offerings.
Q7: What is the future outlook for streaming bundles in the media industry?
A7: Streaming bundles are expected to play a significant role in the media industry’s future. As standalone streaming services face challenges and traditional pay TV declines, bundling becomes an appealing strategy for both streaming services and cable providers. Achieving success with streaming bundles will require a careful balance of pricing and subscriber growth, with more partnerships and bundled offerings likely to emerge through mergers and acquisitions.
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