Viewers are unsatisfied with streaming bundles. Here’s a possible solution

Let’s get ready to bundle. Again.

Readers of a certain age will remember cable subscription bundles from back in the day. But over the past decade and a half, that old cable model has gradually been replaced by the rise of individual streaming services, which offered a more customizable viewing experience. Or so we thought.

“There are now so many streaming content providers that it can be hard to keep up,” said Vincent Piturro, Ph.D., professor of Film and Media Studies at Metropolitan State University of Denver. “What’s more, most of them feature hefty subscription fees, which TV viewers are increasingly reluctant to pay.”

This situation has left many major streamers in a bind, hemorrhaging money even as they continue to produce expensive content for dwindling numbers of subscribers. (Disney+, for one, has lost billions of dollars.) Their answer? Bring back the cable-style bundles.

The attraction of bundles for streaming companies may seem obvious. Viewers who wouldn’t pay the price for three or four individual services might well be tempted to get them all at a discounted rate. And crucially, bundle subscribers have lower “churn” rates, meaning they are less likely to cancel their accounts.

However, Piturro remains skeptical that a new era of bundling will work out well for viewers. “I expect we’ll see more specialized bundles, initially at reasonable rates, that are designed to appeal to particular groups and interests,” he said. “But as soon as the streamers identify which ones are most popular, price creep will kick in for those specific bundles and costs will shoot up.”

FOMO economics

While Netflix has been growing like gangbusters and tremendously profitable, other services are only starting to turn a profit following years of losses. 

Those streamers were following an unsustainable business model, spending too much money to chase too few viewers, said Darrin Duber-Smith, senior lecturer in MSU Denver’s Department of Marketing. And the industry’s rise, at least in part, was driven more by FOMO — fear of missing out — than good business sense, he added.

“Many traditional industry players, such as Disney and Paramount, basically felt compelled to join the streaming revolution, in case they were left behind,” Duber-Smith said. “But as we’ve seen, the results have been disastrous. To feed their new enterprises, these companies have had to cannibalize their own content and steal subscribers from their own existing customer base, all while facing huge losses.”

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The worst part: Even the audience doesn’t seem happy. Besides gripes with almost every aspect of the subscription model, thousands of viewers have struggled to navigate the various platforms and unpick their tangled licensing agreements.

An emblematic lowlight occurred two years ago when “Yellowstone,” Paramount’s most successful show ever, did not stream on Paramount Plus, even though the company owned the rights to the show.

“When you’ve paid to see specific content from one streaming platform,” said Duber-Smith, “and they announce you’ll have to pay a second platform — in this case, Peacock — to actually watch it, you know that’s a classic bait-and-switch.”

Sports hikes

Perhaps no front on the TV broadcasting battle lines has been more vigorously contested than sports rights.

Take football, the national game, which for decades has been a staple of broadcast television. This season, the NFL is featuring at least one game each week solely on a streaming service. Want to see all the pro football action this year? You’ll have to cough up money to Amazon Prime Video, Peacock, ESPN+ and Netflix to get your full fix.

“Sports is probably going to be the biggest area exploited for higher costs, simply because streamers know fans will pay almost anything to watch their teams,” Piturro said.

There have already been steep price hikes in many major sports markets around the U.S., he said: “But now, smaller markets are also figuring out how to monetize their teams, which means fans can expect to pay a lot more in the future.”

And don’t expect the streaming bundles to come to the rescue here. Venu Sports, a long-anticipated sports streaming bundle backed by Disney, Fox and Warner Bros. Discovery, last month became mired in an antitrust lawsuit before it even launched.

Back to the future

Streaming was originally sold as a brave new TV world, a means of escape from the tyranny of cable.

But it’s notable how much the new streaming bundles look suspiciously like, well, the old cable packages. Could it really be that, after so much industry churn and upheaval, consumers are about to land right back where they started?

“They already have landed back where they started,” said Duber-Smith. “The only difference now is that the streamers are, collectively, more expensive and appear to raise their prices every six months.”

However, Duber-Smith does see a potential answer to the current issue: “The streaming industry needs a third-party company to run a single distribution channel for all their content — to act as the official bundler, put everything on the same platform and manage carriage fees for the customers.”

Aggregating all the main services together in one central place, he argued — like virtual shops in a digital mall — would attract more customers and create economies of scale that would enable prices to come down.

But the big irony: If that happened, the streaming industry would essentially have just gone back to the old cable bundle subscription model. Would that be a surprise?

“Not at all. This is what I predicted would happen 10 years ago,” Duber-Smith said. “Because otherwise, to put it bluntly, there is zero path to profitability for most of these companies.”