Subscription leaders are betting on cross-industry bundling as the future for their fast-growing industry, according to a new Bango research which highlights a focus on Super Bundling – a model that provides integrated management of subscriptions through a centralized content hub, delivered through aggregators like telcos.
With data from over 100 executives across leading music, video, and multi-service content providers, the study shows widespread endorsement of this model, which already is a key growth strategy with telcos, as exemplified by offerings such as Optus SubHub and Verizon +play content hub, which bring together dozens of subscription services.
Explaining the rationale behind the subscription industry’s push towards Super Bundling, over two-thirds of subscription leaders say “new customer acquisition” (73%) is a high priority, closely followed by “reducing churn” (68%).
● THE ROAD AHEAD
The research shows that subscription providers have identified several key opportunities in Super Bundling, while emphasizing that time is of the essence. More than three out of five subscription leaders agree that: subscription services should be bundling their services with content providers from other industries (69%), Super Bundling content hubs will be a vital revenue source for subscription services in the future (66%), and Super Bundling content hubs will offer a strong competitive advantage for subscription services (65%).
Over half of these executives (53%) already say Super Bundling will play a vital role in their future customer acquisition and retention strategies. Some go as far to say that not pursuing Super Bundling could be damaging, with almost a third (31%) warning of potential revenue and market share loss for those that do not adapt quickly enough.
When deciding who to select as their bundling partners, communications service providers dominate, with 60% of subscription leaders citing satellite/cable providers as most effective, followed by broadband (56%) and cell phone companies (56%).
● TECHNICAL ROADBLOCKS
While keenly aware of the opportunities of Super Bundling, subscription leaders also point to challenges implementing the model. Three out of five (61%) report that their core challenge when bundling subscriptions is the complexity of managing multiple partners. When trying to achieve this through reseller partners such as telcos, more than half report that the top challenges they face in partnering effectively are: technical integration issues (64%), complexity of contract negotiations (63%), and time-consuming onboarding processes (52%).
To overcome the technical challenges of Super Bundling, subscription services need access to specialized technology and infrastructure, the report assures. Even for those who have the basic tools required to support bundling, building a unified user experience that brings together multiple vendor subscriptions can be complex and costly.
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