18 JUN 2024

USA: Streaming bundles will need to go beyond entertainment

A research by Hub Intel revealed the upcoming relevance of bundling for SVODs, which make up less than 50% of young people's entertainment ecosystem.

18 JUN 2024

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Across all categories -premium video, social video, gaming, music, podcasts, digital reading- the average consumer in the U.S. uses 13 different sources of entertainment, according to a new research by Hub Intel. With all those sources, simplicity is a virtue that many are willing to pay for. The company also highlighted that 59% of respondents said they would pay for an app or service that let them manage and use all their subscriptions in one place – even if that service didn’t include any content of its own.

TV is no longer the center of the entertainment universe. Of those 13 sources, only about 50% are premium video. Among young people, premium video sources make up less than 50% of their entertainment ecosystem.

The “most wanted” bundles go beyond video – and even beyond entertainment. Previously, Hub Intel published a survey where 71% respondents included high-speed internet in their bundle. It was the most-requested ingredient of all 16 items. Moreover, 65% included Netflix, being the only SVOD subscription to appear in the top 5. An MVPD/vMVPD network bundle with live TV made the top 5 (40%) – but more people chose mobile phone service (52%) or a streaming music subscription (43%).

Hub Intel pointed out two opportunities in this context. The first one would be to build or join bundles that cross content categories. The original cable “triple play” found success by simplifying TV, internet, and home phone. Today’s consumers have far more subscriptions, so the opportunity to simplify is more attractive than ever. Bundles that simplify their subscriptions across different kinds of content are more compelling than those that only include streaming platforms.

For example, Amazon Prime members get access to Prime Video. But they also get access to Prime Gaming (a library of video games to download or stream) and a free tier of Amazon Music. In the survey, respondents rated every subscription they use as either “must-have” (“something my household can’t do without”) or “nice to have” (“I might miss it, but can do without”). Prime members who used gaming and/or music content as well as video were far more likely to say Prime entertainment content was a “must have.”

The second opportunity would be to build bundles tailored to specific audiences. Bundles don’t need to be one-size-fits-all. On the contrary, there's a huge opportunity for bundles to meet the needs of a specific group. For example, Gen Z men are most likely to bundle Netflix, internet, music, and phone. But nearly half (44%) included a gaming subscription in their bundle. For them, gaming was more important than Hulu (40%), Disney+ (35%), or Max (26%). Close to a third included a game console lease/subscription (31%) vs. a fifth who selected an MVPD/vMVPD live TV package (21%). A “gamer bundle” marketed to this group would be valuable, but it would also be distinctive – something the many bundles based on streaming video are not.

Hub Intel concluded that media companies that aren’t thinking this way need to start because the resurgence of bundles is not a reversion to the old cable model. It’s yet another evolution in how people will consume all kinds of content in the future. It’s also a big opportunity for traditional aggregators (like cable operators) and for companies that own IP that can be extended across categories. The next stage of bundling will give all providers more tools to attract new subscribers, but also keep them around.