How Bundling Streaming Services Can Challenge Churn in 2024
In 2024, consumer behavior arguably remains the most vexing impediment to succeeding with subscription media, and the prevalence of churn and the abundance of competition for subscription dollars have compelled many providers of subscription services to bolster their revenue with ad-supported tiers. However, creative bundling strategies provide another effective means of keeping subscription services afloat, to the degree that the industry might be developing “bundle-itis.” Experts from Roku, Philo, Bango, Hub Entertainment Research, and Lightswitch discuss the mechanics and benefits of bundling in this clip from Streaming Media NYC.
Why bundling is a “recalibration” of the market
The panel’s moderator, Monica Villar, Co-Founder and CEO of Lightswitch, notes that streaming subscription churn rates have reached levels that were unanticipated 10 to 15 years ago, and bundling has been on the ascent as a corrective measure. She asks Giles Tongue, VP of Marketing at Bango, if bundling is “cable 2.0” or something else.
Tongue says that the initial rise of subscription services and the ease of signing up for them created the “unbundling” of cable, but it also created the problem of too many services and “subscription fatigue” for consumers. But he says that with streaming services bundling, “We're now seeing an opportunity to give people back control to consolidate their subscriptions once again. And they're looking for that control. We have lots of data which says if they could regain that control, they'll be able to subscribe to more products and enjoy more services. A third of people are subscribing to products they're not even using. So it's a mess at the moment. So it's not quite cable 2.0, it's a recalibration of the market bringing things together.”
The benefits of streaming bundles combined with cable, satellite, and telco providers
Mark Loughney, Senior Consultant, Hub Entertainment Research, says that based on their recent research, “One of the more surprising results is that if these services are bundled on your cable, satellite, or telco provider, there's higher customer satisfaction with that service. So if you are a Comcast or you are a Charter and you see that kind of data, why wouldn't you do these things? Why wouldn't you roll out voice-activated remote, which is all of these things that help people organize, discover, and ultimately be more satisfied with their service?”
Villar says, “I think it's interesting how market consolidation or bundling impacts different types of players in the space.” She asks Adam Salmons, Head of Content & Business Development, Philo, how bundling specifically impacts his company.
“I think specifically for players like us, it's an opportunity because we're seeing people partner in ways they haven't before,” Salmons says. “And with [Philo] still being very focused on linear TV, we provide an important revenue stream for our partners. And I think having additional products is an opportunity for us to work with them in a new way, enhance the value we're bringing to our subscribers, and ultimately keep them subscribed with us for longer.”
Why streaming bundles are less simple to manage than cable bundles
Villar asks Anastasia Pronin, Team Lead, Partner Growth, Roku, how bundling has impacted her work.
Pronin argues that original cable bundles were, in many ways, easier to manage for both distributors and users. “You signed up for a certain package, and your content was distributed,” she says. “Even now, with all the bundles popping up, there's just so much choice. [And] you can't just launch these overnight. There are contractual, operational, and technical considerations. You can't just light up these bundles immediately. So I think that fragmentation is definitely causing some headaches. On the platform side and on the content side, we're all trying to figure it out together.”
However, despite these challenges, Pronin notes that streaming bundles have so far proven to reduce churn. “We're seeing churn that's much lower for bundles, somewhere in the ballpark of 40% less,” she says. Still, she wonders if that is enough to sustain the current bundling market.
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