When modern audiences want to watch a movie or a TV show, they often look to their favourite streaming service. Since 2019, there has been no shortage of competitors to Netflix. Both legacy media production companies and new challengers have entered the streaming market, competing for subscribers and their audience’s attention span. Five years on, churn rates are on the rise, and in response, streamers are deploying their solution – the great re-bundling.
Source: Unsplash
The Streaming Shift
As a first-mover, Netflix was pretty much uncontested in the space as they offered convenient on-demand video in people’s homes. The company quickly gathered one of the world’s largest subscriber bases and started creating original content with its astronomic wealth. It started with TV shows, but then they started producing their own movies, and still do to this day.
The rise of Netflix happened amid a broader shift toward online entertainment, thanks to video-sharing sites like YouTube. Live streaming became economically viable during this period too, so real-time video broadcasts became popular. They built upon the new business models of solo entertainers, e-commerce marketers, and also iGaming providers.
These had already migrated at least part of their services online, with some new entries to the market starting out entirely online. The game of blackjack, for example, had experienced a revival at exclusively online casinos, with multiple versions available to play. It is still possible to find these variants – Zappit, Perfect Pairs, Double Deck. But streaming has enabled the platforms to expand their offerings even further, with the addition of live-streamed versions, where users join an online game hosted by a human, with interactive features that play out in real-time.
Netflix made similar moves, pivoting from a DVD rental company to develop an on-demand streaming service that found pride of place on people’s TV screens. As smart TVs came along, Netflix’s prominence drove them to integrate streaming services into the home systems we were all buying. For many, this was the new way to watch television.
Streaming Churn Explained
As competitors like Amazon Prime Video, Apple TV+ and HBO’s Max entered the scene, services took stock of the unique distribution rights they owned. By providing a unique library that couldn’t be found anywhere else, they figured they’d be more competitive against the other streamers. Predictably, they also followed Netflix’s example by making their own movies and shows too.
It’s a winning strategy but, in any market, there’s only so much winning to go around. Generally, each service requires a subscription payment, not counting those that offer free trial periods. The average consumer isn’t paying for every single service out there, and if they were, it’d be much more costly than getting a cable package.
As more hit movies and shows dropped, some members of the audience started to churn. This is where an audience will subscribe to a service in large numbers, view the content they wish to see, and then let the subscription expire instead of renewing it. If another viral, headline-grabbing movie drops, they’ll come back and do it again.
Besides churn, the rise of free ad-supported television – FAST – also hinted that users were less willing to wrestle with multiple streaming services. With FAST, users view ads instead of paying for content plans. Some FAST services even provide a rigid watch schedule, bringing it closer to broadcast TV than the on-demand formula.
The Great Re-Bundling
Throughout 2023 and now 2024, the largest streamers in the world have met and held long negotiations over the market. It’s been called ‘the great re-bundling’ – a flux of mergers, partnerships and other collaborative efforts by the world’s biggest names in media. It arguably started before 2023, with the merging of Warner Bros. and Discovery.
More recently, however, Paramount has been engaged in a long, public hunt for a buyer. As part of the deal, they want to merge the Paramount+ streaming service with whatever equivalent service the buyer offers. At first, it was reported that HBO was in negotiations for a Max-Paramount merger. That fell through, but now Paramount has agreed to a merger with Skydance. As part of the deal, Skydance will invest $8 billion (£6 billion) into the company valued at a total of $28 billion (£22 billion).
Elsewhere, Comcast’s Peacock TV has partnered with Netflix and Apple TV+ to launch the StreamSaver bundle. With it, users get all three streaming services for less than what they’d cost with individual subscriptions. In sports, Fox is building an all-new streaming service with Warner Bros. Discovery and ESPN with the same aim. In the coming months and years, we can expect more news of further collaboration between streaming giants.
Source: Pixabay
For businesses under the same umbrella company, bundling is nothing new. With the great re-bundling, competitor streaming services are coming to the table and devising a way that everybody can keep subscribers. It’s a much-needed pressure release valve for one of the most competitive industries in media right now.
For consumers, it means better deals for the most prominent streaming services and more content from all of them. If bundling is the next big trend hitting the industry, then the days of choosing just one service may become a thing of the past.
