LONDON—Streaming TV is at a crucial juncture as consumers grow weary of managing multiple subscriptions and choosing what shows or movies to watch while some streaming services teeter on the edge of marginal profitability as a consequence, a new report from MIDiA Research says.
The report, “Bundling 2.0: Pivoting the cost-of-living crisis into a cross-entertainment growth opportunity,” examines the struggle services face and suggests they refocus their strategy on offering content bundles.
"Paying a monthly subscription to access hundreds of TV shows and movies has been key to fueling the TV-streaming revolution. But as SVOD services shift their focus from amassing subscribers to delivering profits, monthly contracts may hinder rather than help them reach financial sustainability,” says Ben Woods, Video Analyst at MIDiA Research.
“Bundled deals that encourage consumers to commit to annual contracts would give the streaming TV services a better chance at becoming self-sustaining businesses with a bright future.”
Bundles make managing subscriptions easier while ensuring streaming services recurring revenue. Moving away from shorter-term contracts in favor of longer contracts with predictable revenue will address the subscription-hopping challenge services face and help them maximize profitability, the report says.
The report also points out that:
- Nearly 25% of consumers in Q4 2023 said they preferred free access to multiple TV-streaming services as part of a bundle, highlighting the demand for bundled offerings that simplify the streaming experience for consumers.
- Consumers value pure entertainment bundles over connectivity bundles with telecom operators. The report suggests telcos should focus on promoting TV-streaming subscription management as a key stand-out feature of their services to address this preference.
- Large tech companies, like Netflix, Amazon, and Apple, successfully provide cross-entertainment access by bundling services within their apps. The report encourages TV-streaming services to forge cross-entertainment bundles with rival services to drive engagement without significant additional investment.
- Netflix is leaving money on the table and is missing out on opportunities by not playing a key part in the bundling revolution. The report suggests Netflix pursue a distribution business similar to Amazon channels, which allow customers to bundle niche streaming services with their subscriptions.
"This report shows how bundling and utilizing the increasingly recognized local, unique strengths of telco providers can help international video services achieve profitability and, crucially, meet the emerging needs of consumers,” said Tim Mulligan, lead video analyst and co-founder of MIDiA Research.
More information is available on the company’s website.
