There’s no doubt about it: Bundles are back in a big way.
Paramount Global CEO Bob Bakish essentially spoke for the entire streaming industry on the company’s Q2 earnings call last week, when he remarked that bundling “will be a growing part of what we’re doing.” And he did not rule out the possibility of partnering with another SVOD provider on some form of bundle.
“Bundling has been one of the tried-and-true methods of value creation in media. And certainly, as we enter the streaming space, bundling is part of our strategy,” Bakish said.
This is only the latest indication of how the video business pendulum is swinging away from the pure à la carte model of subscription streaming and back toward something resembling the cable model of old. It’s for this reason that Variety Intelligence Platform dove deep into the topic in our special report “Streaming Service Bundles,” examining the packaging types and trends redefining the sector.
To complement this coverage, we held a webinar with a panel of streaming industry experts to discuss how and why SVOD is shifting back to bundling. Joining me for the in-depth conversation were Jon Giegengack, founder and principal of Hub Entertainment Research; Sarah Henschel, principal analyst for media and entertainment at Omdia; and Anil Malhotra, cofounder and CMO of Bango — who all worked on data featured in VIP+’s special report.
One key topic in the one-hour webinar was what’s driving consumer demand for more streamlined subscription packages. It’s become clear that frustration is mounting with the fragmented landscape of à la carte options, which at one time seemed a freeing relief from the rigidity of cable.
“Maybe the most important behavior defining [the streaming era] has been people stacking multiple video services on top of one another and creating their own bundle,” Giegengack said. “There’s a very real need among consumers to make all of these options … easier to navigate and easier to use.”
Malhotra pointed out doing so could be beneficial for streamers as well, noting a Bango survey found “consumers said they would take out more subscriptions if there was a way they could be bundled together in a single, manageable package. Nearly 80% of consumers said they would be more loyal to a service provider that gave them simple, consolidated subscription management — a system for allowing them to organize all of their subscriptions together.”
This all raises the question of whether the video industry is truly headed back to the future, with SVOD returning to a cable-esque package of all the major companies’ services. But there’s still reason to be skeptical of a true second coming of cable.
“All these streamers are trying to bump up revenues, and bringing in bundling is going to help keep consumers within the ecosystems, just like the cable offering used to,” said Henschel. “Returning to that bundling model can bring profitability, but we have to balance it with, why did people leave cable? Because it got too expensive, because it was very difficult to cancel your subscription or to join a subscription.”
Indeed, perhaps the foremost takeaway was that however bundling evolves, simplicity plus flexibility will be key to its success as direct SVOD subscriptions ebb and streamers strive for profits. Giegengack said Hub’s research has found “a non-trivial number of people” willing to pay more for a bundle of services they want than for “the sum total of the platforms themselves.
“I think that’s one way that companies can drive retention … but also drive profitability, because people will pay more for that better experience of just [paying for] the things they want to use.”
Watch the full webinar above for more insights from Giegengack, Malhotra, Henschel and VIP+. It’s industry essential.
Now dig into the data-filled VIP+ subscriber report …
