Entertainment services lead the subscription economy for U.S. internet households, where 89% of users have a streaming video service, 32% subscribe to a streaming audio service, 20% subscribe to a gaming service, and 16% have a gym membership. However, main OTT services have announced bundle offers in partnership with other industry players, in an effort to mitigate churn and increase acquisition. According to “Effective Bundling: Pain Points and Expectations from Subscription Leaders”, a white paper by Parks Associates, in partnership with Bango, bundling and partnerships offer numerous benefits to their partners: Increasing customer satisfaction as measured by net promoter score (NPS), lowering churn, and enabling companies to differentiate service offerings.
Parks Associate highlighted a 22-point lift in home internet provider NPS associated with bundled streaming video subscriptions alongside home internet service. Customer NPS is highly correlated with the number of bundled services they receive from their ISPs—customers who receive six or more additional services from their provider score an average NPS of 55.
“Partnerships are increasingly driving acquisition and retention,” said Kristen Hanich, Research Director, Parks Associates. “Partnerships enhance brand awareness and market reach, reduce customer churn, and remove friction from the user sign-up process, in addition to increasing overall customer satisfaction.”
Recent cases of partnerships between streamers include the announcement of Venu Sports, the sports streaming service in which Fox Corp, ESPN, and Warner Bros. Discovery will join forces. Also, Comcast lately announced the price for its StreamSaver bundle, which combines subscriptions to Netflix, Peacock, and Apple TV+.
“In a short period of time, subscription bundling has graduated from just a distribution tactic to a fundamental driver of consumer engagement,” said Giles Tongue, VP Marketing, Bango. “Leaders across the subscriptions world recognize the importance of bundling at scale. It goes beyond acquisition, delivering greater consumer satisfaction, increased longevity and more profitable relationships. Bango technology helps many of these leaders capitalize on Super Bundling, building mutually successful partnerships with telcos and other bundling partners.”
Executives find any bundled partnerships can be compelling. However, telcos — including both home internet and mobile providers — are referenced as a natural content fit for many service types and offerings, offering a wide reach, an already established recurring billing relationship, large marketing budgets, and the trust of consumers.“Successful partnerships also don’t need to be one-off deals – investing in long-term integrations, particularly with telcos, may pay dividends,” Hanich concluded.