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Bundled streaming services could be answer to consumer burnout, churn

Dec 5, 2021 | By PYMNTS.com

As streaming services continue their steady flow into homes and devices, viewers are taking more and more over-the-top (OTT) services. However, many already subscribe to paid TV services, and it’s hard to know what to subscribe to — which gets consumers thinking.

Such thoughts are not in the best interests of streaming services competing for subscribers. It’s not a zero-sum game.  With the right customer experience and distribution partnerships, streaming services can unlock bundles that make it easier and economical for customers to take more and more services.

This is where subscription bundles can work wonders, packaging greater value for the streaming dollar with more channels and content. But as Jeremy Simon, vice president, global streaming partnerships at VUBIQUITY, tells it, “we haven’t seen a real takeoff of bundles … yet.”

In a recent conversation with PYMNTS’ Karen Webster, Simon, who oversees partnerships for VUBIQUITY, said bundles that include non-content services are also a key part of the future of streaming.

However, the space is still shaking out as standalone channels vie to be one of the roughly three streaming services in the average household, according to PYMNTS research. This is causing a deluge of marketing and cross-promotions, as streaming services compete for the same consumers.

“I’m seeing Roku offering new customers subscriptions to HBO Max — or Best Buy offering subscriptions to Apple Music or Apple TV+,” Simon explained. “I’m seeing Disney using ‘Good Morning America’ to promote a Hulu offer, or ‘The Today Show’ being used by NBC Universal to promote a Peacock premium offer.

“What we’re seeing is not just the properties, but the way you’re offering it, how you’re offering, what you’re offering, who you’re offering it to, is really capturing this ecosystem where we have platforms, streamers and distributors all coming together.”

All the players jumping into streaming as a value-add may be confusing to consumers now, Simon said, but scratch the surface and you’ll find clues about what’s coming next.

“The bundles we’re seeing in the streaming or [direct-to-consumer] space are quite different by partner, and we’re not seeing a ton of them,” Simon said. “There are pioneering [companies] like T-Mobile that offer a whole wealth of streaming services and offers to new customers from Netflix, Paramount Plus, Apple Plus, Google Storage.”

For telecommunication operators (telcos) and other industry players, these moves are about attracting new customers and building loyalty, not providing entertainment. However, they suggest a near future where standalone channels blend into bundles that consumers value — avoiding sticker shock resulting from so many individual streaming charges hitting users’ accounts separately.

Saying this is where partnerships will shine, Simon told Webster, “When I talk to streaming services and they want to do deals with distributors, what are they looking for? It’s often a lower churn, and that churn comes not just from being on the telco, but deep inside of it, almost invisible, and they really get that from deep bundles.”

In other words, if your TV bundle is just a line item on your phone bill, streaming services can worry less about being singled out for cancellation.

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Lowering Churn via Partnerships

Simon said VUBIQUITY is helping companies pair up with streaming services where they add the most value.

“One of the areas we’re adding value is not just doing integrations, but matchmaking, trying to level set on each side of the network’s expectations and trying to find people who are able to work together because they can align on what it is they’re delivering,” he said.

“If I’m putting something on my telco bill, it’s probably going to offer lower churn to most streaming services. That is very valuable to them … and something that’s worth a lot of money.”

While telcos are an obvious starting point, as they offer active networks of millions of video-enabled devices and the eyeballs to match, bundling has implications for other sectors.

As Simon told Webster, “What we’re seeing is that [this] may go beyond the telecoms industry to other businesses that have customers and want to offer more services to their customers. It could be financial services providers, credit cards, utilities, banks, [and any] companies that have those customer relationships.”

He notes, however, that “it’s hard to find that value because streaming margins probably aren’t as generous yet as TV [margins].

“If I’m trying to construct a bundle, I want to make it profitable, and I want to make enough of a discount to attract customers,” Simon continued. “That is a part of the industry that hasn’t quite [been] figured out, but I think it’s coming.”

See alsoStreaming Wars Heat Up as Consumers Do the Math on Subscription Services

Meta-Aggregation and More

To get there from here, Simon describes an incremental process where partners — from TV operators to banks, merchants and more — bundle channels with their products and services, strengthening promotions with the pizzazz of streaming, without necessarily also offering all the à la carte channels.

The payoff to streaming services goes beyond being in the bundle to finding loyal new fans, he said.

“One of the things that always interests me about the streaming space is the asymmetry between a new customer who has no idea what content is on a service until they sign up, versus an existing customer who is very familiar,” Simon said. “Our industry can do an even better job at allowing customers to navigate, to try, to sample, to discover — and I think distribution partners really play a very strong part in that, just as TV operators have done in the content space.”

As customers move out of lockdown mentality and find they have less time for all that streaming entertainment, Simon said, “There’s a lot of services out there and some of them will evolve. Some of them will merge. Some of them will change.”

Using Roku’s acquisition of Quibi content as an example, he said, “We’re seeing different forms of evolution, and we’re seeing some meta-aggregation, streamers looking to offer other streamers content. We have Peacock and ESPN+ distributing [World Wrestling Entertainment and Ultimate Fighting Championship] content inside their app. I think this will evolve.

“There’s a potential to take many more partnerships,” he added, “but the offer has to be right, the price has to be right, and the customer experience has to be right.”

See also: Disney+ Subscription Slowdown Reflects Broader Streaming Trends

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