Are streaming services forcing customers to bundle?

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Consumers should weigh the value of ad-supported options

There’s been a lot of chatter lately about streaming services making moves that look a lot like cable’s bundled tiers – you know, those “well, if you want to get that channel, then, you’ve got to take this channel, too” thing. And, before you know it, you’ve got a sizable dent on your credit card because you’ve signed up for 300 channels, but are only watching a handful of those.

Up to now, players in the bundling game include Paramount+ which has a small bundle built around options like NFL football; Showtime and local CBS News; and Disney+, which has a more considerable bundle with ESPN+ and Hulu, ad-free, ad-supported, yadda yadda. Those moves haven’t rocked the boat, but that’s likely on purpose.

For consumers who’ve been around long enough to know when cable was $15 a month compared to the $100+ it can be today, they know the creep can be slow but steady.

Subscription gurus know that an incremental pace of an extra dollar here, an extra dollar there won’t push the consumer over the edge, but it will beef up the bottom line. Ask Hulu or Disney.

In Disney+’s case, the latest metrics show 152 million subscribers. If the service raised its price just 50 cents a month, that’s about $75 million dollars in new revenue rolling in every 30 days.

So, is this good or bad for the consumer?

Dan Goman, the founder and CEO of Ateliere Creative Technologies, an entertainment technology business that originated as a content company, told ConsumerAffairs that streamers are moving slowly. Where cable devolved into a complete mess with consumers often caught in the middle of slugfests between cable operators and content creators, he says today's streamers are making sure they don’t make the same mistake.

“It's early days, but the bundling we are seeing today in the streaming space does create value for the consumer," Goman said. "Apple and Amazon, for example, offer bundles that include streaming video and music, making it a lot more cost-effective for most consumers with separate subscriptions.”

What do you keep? What do you cancel?

Consumers are however at a tipping point. A recent Parks Associates study shows that half of the country’s households with broadband access currently hold subscriptions to four or more streaming services, and nearly a quarter have nine or more. Added together, that’s a serious chunk of change. 

Goman says that if they're trying to reset their discretionary spending, they're going to have to pick and choose. And if one ConsumerAffairs reviewer is any indication, streaming services need to pick up the pace of making sure the subscriber knows exactly what they’re paying for.

“The bundle billing is incredibly confusing. I was using ESPN+ and Hulu before Disney Plus even came out. I then got the bundle to try it out,” Steven of Seattle wrote.

“Disney+ is useless except for kids so eventually I [tried] to cancel. I was being charged across multiple cards for the one bundle for no reason and they couldn't figure out what charge was for what service. I wanted to keep Hulu and ESPN+ but they couldn't figure it out so I canceled them all. Horrible experience."

What’s the consumer to do?

Goman said that the challenge for a consumer like Steven is that they've now got all these options they have to weigh. 

“It's gotten to the point where most people don't even know how many subscriptions they have," he said.

One serious consumer-side problem is that content owners have used various methods to entice consumers into free trials that have automatically rolled into subscriptions that are very difficult to manage.

"Some are in the Apple store, some are direct subscriptions, and some are through Amazon or other digital entertainment platforms. It's a logistical nightmare.”

For the moment, Goman thinks the consumer is in the driver's seat.

“It just takes a little bit of work to structure one or more high-value bundles that save money and address most or all entertainment needs. For most consumers, a bundled service from one of the primary streaming providers and a growing number of ad-supported services will suffice for most of their entertainment needs.”

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