Will Streaming Bundles Start Requiring Long-Term Contracts Like Cable?
Will Streaming Bundles Start Requiring Long-Term Contracts Like Cable?
New data from Aluma shows that a majority of customers would be willing to accept a 1-year contract in exchange for meaningful streaming discounts.
The streaming industry has reversed course on many of its once-sacred tenants over the past two years. Ad-supported streaming plans and password-sharing restrictions run counter to the early philosophy of the streaming era when the medium wanted to do everything in its power to stand apart from traditional pay TV. However, recently, the quest for revenue optimization has changed all that, and now every top service — aside from Apple TV+ — has an ad-supported plan. Disney+, Hulu, and Max are all working to begin enforcing account-sharing rules, which Netflix has had in place for over a year. New research published by Aluma Insights this week suggests that the next streaming taboo to be broken could come in the form of long-term contracts. Offering discounted bundles in exchange for longer commitments would align streaming even more closely with the cable bundle it is trying to replace.
Key Details:
- Aluma found that Netflix, Disney+, Prime Video, Hulu, and Max are the five services most likely to be chosen for a streaming super-bundle.
- More than 50% of viewers would sign up for a one-year contract for a bundle of these services at $40, $50, or $60 per month.
- Three new streaming bundles have been announced since the start of 2024, and more are likely on the way.
Aluma took a look at how willing viewers would be to accept a one-year contract in exchange for significant discounts on a streaming bundle. The media insights firm surveyed nearly 2,000 individuals and found that, with only one or two exceptions, each demographic group listed the five most in-demand streamers for a hypothetical bundle of five services would be Netflix, Prime Video, Hulu, Disney+, and Max in that order.
Survey respondents were broken into three categories: viewers who were offered this hypothetical bundle for $40 per month, at $50, and at $60. Each version of the bundle would require a user to sign up for a one-year contract in order to get the discounted price. Any of these three figures would represent a savings over what consumers would pay to get ad-free plans of all these services separately; altogether, ad-free plans for the five streamers would cost $75.45 per month today.
The results showed that while the $40 version of the bundle was clearly the most popular, all three price points would see viewers be “somewhat likely” or “highly likely” to sign up at a rate of over 50%. Customers are quite used to paying for their streamers month-to-month, but Aluma’s numbers show that they would at least think about exchanging that freedom for a lower rate.
On average, 65% of respondents were “somewhat likely” or “very likely” to sign up for a bundle of the five services if they had to agree to a one-year contract. Demand for the bundle held steady among the “very likely” cohort across the $50 and $60 per month price points, indicating that the first group of viewers to adopt such a bundle would likely not care too much which price the bundle settled on.
Which New Streaming Bundles Have Been Announced Recently?
Disney, Fox, and Warner Bros. Discovery got the ball rolling on streaming bundles in February when they announced they would join all of their sports-themed cable channels on a new live TV streaming service called Venu Sports. This isn’t a joining of subscription video-on-demand services, but it is expected to be offered with monthly payment options and is likely to cost around $50 per month.
Disney continued its bundling ways by agreeing to offer its entertainment streamers Disney+ and Hulu with Warner Bros. Discovery’s flagship service Max. There are no price details available yet, nor has a release date for the combo been announced, but I predicted a price of around $30 per month for the unnamed bundle when it was first announced.
The newest bundle to be announced is also the first to hit the market. In mid-May, Comcast CEO Brian Roberts announced that his company’s streamer Peacock would bundle with Netflix and Apple TV+ in an offering available to Xfinity broadband, TV, and mobile customers dubbed StreamSaver. The plan is just $15 per month for ad-supported Netflix, Peacock, and ad-free Apple TV+, and is rolling out to Xfinity customers this week.
Now that streaming providers are actually willing to team up with the competition to bring new customers to their platforms, the number of bundles available will only increase. Viewers may have to make some compromises to get them though; Aluma’s latest data shows that customers are willing to accept long-term contracts for streaming bundles, which would align the medium of streaming even more closely with the cable bundle it has tried so hard to replace.
Disney+
Disney+ is a video streaming service with over 13,000 series and films from Disney, Pixar, Marvel, Star Wars, National Geographic, The Muppets, and more. It is available in 61 countries and 21 languages. It is notable for its popular original series like “The Mandalorian,” “Ms. Marvel,” “Loki,” “Obi-Wan Kenobi,” and “Andor.”