09 / September / 2021

Is Bundling A Cure?

For a long time, TV service providers offered their customers the choice of various channel packages while not all the users wanted to pay for the content they didn’t watch. Today each major video publisher has its own subscription-based streaming platform, often with unique content, users freeze seeing monthly subscription payments. Bundling is the obvious way for viewers to save money and satisfy their hunger for content. Some streaming networks predict higher subscriber churn of the post-COVID times, and thus adopt new competitive strategies.

Is Bundling A Cure?

So, How Do You Bundle?

Ampere analysis points out that bundling has become the top growing trend within the streaming industry.  Bundles seem to benefit both parties.

From the user’s perspective, they improve the economics of the subscription experience, let people trial new services without paying anything straightaway and help with subscription fatigue.

From the brand’s standpoint, bundles retain existing audiences and engage new ones to join, while also providing publishers with access to more first-hand customer-related data.

There are three main types of bundling in the streaming space:

Content bundling.  This relates to content packages. They can consist of VOD (video on demand) + live TV offers, like YouTube TV or Hulu + live TV that stream major broadcast and cable networks to one’s devices.

Cross-platform bundling.  Normally this includes multiple types of subscriptions such as music + VOD, or cellular plan + free VOD access. For instance, with the Verizon Unlimited deal, users get Disney+, Discovery+, and Apple Arcade/Google Play Pass for six months.

Ecosystem bundling.  As big tech companies own various services, they eagerly pack them up into bundle offers with a whole bunch of perks inside. Perfect examples are Apple One, which combines multiple Apple subscriptions and Amazon Prime with free shipping, movies, books, and other features.

It’s hardly surprising these multi-brand collaborations drive millions of consumers to switch their subscription preferences.

Why Bundle?

Brands aspiring to dominate every market niche they enter, such as Apple, Amazon, or Hulu, see bundling as a great strategy to stand out in their competitive crowd. On top of that, subscriptions are a source of first-party user data which, among other, contains names, emails, and other identifiers, voluntarily shared by consumers. This information can later be used for precise ad targeting, especially amidst cookie-less advertising trends.

Free-bundled bait can also be used to drive device sales. Apple, for example, provides free annual access to their Apple TV+ streaming service for each Apple device purchased. These devices, in turn, encourage users to fit into the company’s subscription ecosystem. 

Is It A Cure?

With all its benefits, it might seem bundling is a go-to solution for every  SVOD  (subscription video on demand) provider out there. There some ‘buts’.

One of the disadvantages of this approach is that it requires not only cooperation but also precise coordination between partners. Finding the right reliable ally takes resources and time.

Also, not every cooperation drives increased subscription sales, but every bundled sale can make less profit than the regular one. It’s a matter of discussion which way to tilt marketing efforts: partnering or standalone promotion approach.

Small streaming services and niche channels will likely have nothing to gain from such partnerships since it is only possible and logical to deal with the brands from a similar team. If the team is poor, then the results are likely to be too. These are the reasons that keep industry leaders (Netflix, for example) away from bundling: nobody is interested in less income.

At the end of the day, it is rather a question of time and relevant reports to tell whether and when bundling is the right approach. For now, the trend seems to be gaining momentum.