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The rise of subscription streaming services was supposed to mark the end of the bundle — the pay TV bundle at least. But now that every major entertainment company has a couple of years in the streaming game under their belts, it has increasingly become a battle of the bundles, with each service seeking out its own unique value proposition or partner to make the most compelling pitch to consumers with a limited streaming budget.
“There have been some comparisons made that say the streaming video industry is copying the cable industry, and this is an example of that,” says media consultant Brad Adgate.
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The latest salvo was launched by Walmart, run by CEO Doug McMillon, which revealed a new perk on Aug. 15 for its Walmart+ members: a complimentary subscription to Paramount+. The service (think of it as Walmart’s take on Amazon Prime) bundles free shipping and local delivery as well as gas discounts and other perks for $13 a month, or $98 a year. Now, it will throw in Paramount+ (normally $5 a month) for no extra cost. Walmart+ currently counts more than 11 million members, compared with Amazon Prime’s more than 200 million members.
“After having divested Vudu [to Comcast] only a few years ago, it’s interesting to see Walmart’s partnership with Paramount+ show just how effective streaming bundles can be for both traditional streaming platforms and nontraditional content players,” says Dan Goman, CEO of video tech firm Ateliere. “I anticipate more partnerships with this type of framework into the near future as the volume of streaming activity continues to grow.”
But the Paramount+/Walmart deal is just one of many pacts streamers are making to juice their numbers, or to otherwise entice potential subscribers. In fact, it’s not even Paramount’s only offer. Paramount already bundles Paramount+ and Showtime, and on Aug. 31 revamped that bundle to bring Showtime shows to the Paramount+ app for a promotional price of $7.99 a month.
Among entertainment companies, however, none is more bundle-happy than Disney. When the company launched Disney+ ($8 a month) in November 2019, it partnered with Verizon to give a year’s subscription to many of the telecom giant’s customers. Neither company disclosed exactly how many Verizon users took advantage of the deal, but it is widely assumed by Wall Street analysts to have contributed millions of subscribers.
Since then, Disney has launched its own bundle (The Disney Bundle, $14 a month) of Disney+, Hulu and ESPN+, and Verizon now offers certain subscribers a six-month trial of that more expensive offering. But it hasn’t stopped there. Disney has since expanded its bundle offers, including a partnership with its National Geographic division that bundles Disney+ and Nat Geo’s century-old magazine, and struck a deal with Uber to offer its users two free months of Disney+ (Disney+ subs in turn got six months of Uber One, that company’s loyalty program).
And Disney is thinking even bigger. A source familiar with the company’s plans confirms that it is considering a subscription membership program that could tie together its streaming services to its resorts and theme parks, as well as consumer products.
“Disney is more than a brand to our consumers, it’s a lifestyle, and we are exploring how to better serve them across our many touchpoints,” said Kristina Schake, chief communications officer for Disney, in a statement. “A membership program is just one of the exciting ideas that is being explored as we consider ways to marry the physical and digital worlds to create the next generation of great Disney storytelling and experiences.”
There’s no question that Disney’s success (221 million total streaming subscribers) is due, at least in part, to creative bundling. And the rest of the industry is trying to carve out their own pieces of the pie.
HBO Max ($10 to $15 a month), when it was owned by AT&T, was bundled with certain AT&T internet and wireless plans. In August, Warner Bros. Discovery announced that the company had re-extended that agreement. And on the company’s last earnings call, CEO David Zaslav suggested that the company would be open to partnerships to further extend the service’s reach (for starters, it may return to Amazon’s “Channels” program, which helps entertainment companies sell their services to Amazon customers). The company already partners with Verizon to offer six free months of Discovery+.
“They are trying to cut down on churn, and the more stuff they have, or opportunities, or deals you make, the less likely you are to cancel your subscription,” Adgate says.
In some ways, Amazon and Apple are the biggest drivers of the bundled push. Apple TV+’s Apple One ($15 to $30 a month) bundle offers a compelling option, with a music service, news and games alongside Apple TV+, while Amazon leverages its Prime Video unit to bolster its Amazon Prime subscription service ($139 a year).
But while Amazon and Apple are firmly in control of their own destinies with Prime and Apple One, Paramount is taking a back seat to Walmart with the Walmart+ deal. Paramount+ will be a perk of Walmart’s offering, with the retailer presumably paying a low wholesale rate for each sub. And of course, it isn’t immediately clear how many Walmart+ subscribers will take advantage of the offer, though it is safe to assume they are hoping it brings in millions of new Paramount+ subscribers.
“[Former Netscape CEO] Jim Barksdale’s quote is as relevant today as when he said it: There are ‘only two ways to make money in business: One is to bundle; the other is unbundle,’” says Stefanos Metaxas, chief strategy officer of Bliss Point Media, a marketing technology and analytics firm. “The writing is on the wall for [Paramount’s] traditional business, and they want to supercharge its growth. To do so, they can spend a lot on customer acquisition or partner with someone like Walmart and increase their audience pool overnight.”
Still, the trendlines are clear: Bundles are back in vogue. And the evolution is expected to continue.
As for what’s to come in the world of content bundles, it might help to look at Spotify, which currently offers one of the best content bundles available… but only if you are a registered college student. The music streamer’s Spotify Premium Student bundle includes services from Disney and Paramount, combining Spotify Premium, and the ad-supported tiers of Hulu and Showtime, for the profit-incinerating price of $4.99 per month, a nearly $30 per month discount off the retail prices of those services.
Such a bargain is unlikely to last long in the open market (“obviously they are banking that in the years ahead they will recoup the dollars they lost by giving these college students a price break,” Adgate notes), but if Disney is willing to bundle Hulu with Spotify for students, why wouldn’t it consider a more expensive but still value-driven option for the masses too?
Whether it’s creative bundling of content, partnerships with other subscription offerings, or channel stores from Amazon, Roku or (reportedly) YouTube, the landscape around streaming is shifting once more, and it’s going to get a little bit more expensive… even if the value proposition improves.
This story first appeared in the Sept. 6 issue of The Hollywood Reporter magazine. Click here to subscribe.
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