THR: Netflix and Apple Open Door to Bundling With Streaming Rivals -- (edited)
Posted by
mud
Dec 4 '23, 06:37
|
A Verizon-backed Netflix and Max deal, and talks between Apple and Paramount suggest that streaming bundles may be about go get bigger and better.
BY ALEX WEPRIN
DECEMBER 4, 2023 6:31AM
After years of mostly sitting on the sidelines, two streaming companies that have long been reluctant to bundle their wares with competitor services seem a bit more open to the idea.
On Monday, the telecom giant Verizon announced a $10 per month deal that includes the ad tiers of both Netflix and Max. That’s a 40 percent discount compared to their standard prices.
And it’s notable because while Max has offered discounted pricing before (Max just offered its ad tier for $3 per month for Black Friday), Netflix has notably not offered any discounts or wholesale prices on its plans for many years.
To be certain, it is not clear whether Netflix is offering a wholesale price to Verizon or how the discount cost is being shared between the three companies, but the 40 percent discount suggests that either Verizon, Warner Bros. Discovery, Netflix or some combination thereof is helping to subsidize those costs.
Verizon CEO Hans Vestberg said at a UBS conference Monday morning that the bundle is something that “nobody else can do” and that forming new bundles is a priority for the telecom company.
Verizon, it should be noted, has offered Netflix in its bundles before, but it has never done so for the ad tier, and has suggested that in the past it was shouldering the cost of Netflix in its other bundles.
The launch of Netflix’s ad tier a year ago, at a lower price point, seems to have been a tipping point, with Netflix executives having noted that it is generating better margins on that tier than its base ad-free tier.
At the same time, another streaming service that has been reluctant to bundle seems more open to it. Apple TV+ has held some talks with Paramount about an Apple TV+-Paramount+ bundle, sources confirm, though the exact nature of what that bundle will look like remains unclear (it could happen through an intermediary like Verizon).
Apple TV+ does not have an ad tier yet, but it did recently raise prices, making fighting churn a priority. Apple has had success with a bundle of its own services (Apple One includes services like Apple TV+, Apple Music, Apple Arcade, Apple News and cloud storage), but as it seeks to grow its streaming video service to profitability, it seems open to partnering with other players in the space to keep subscriptions consistent and to reduce churn.
The streaming services from legacy media companies like Disney (Disney+, Hulu), NBCUniversal, (Peacock), Warner Bros. Discovery (Max) and Paramount (Paramount+) have long shown a willingness to discount or bundle, either in-house (the Disney Bundle) or with partners (Peacock’s deal last month with Instacart+, Paramount+’s deal with Walmart+).
But the new bundles involving Netflix and Apple suggest that some players that have largely avoided discounting or wholesale offers may be warming up to the idea, and partnering with their legacy media competitors to stay in the game.
|
Responses:
|
