William Gallagher
Apple TV+ and Paramount+ each reportedly lost 7% of their subscribers in October, and are said to be in early talks to offer users a bundle of both services.
Paramount+ has previously made a similar deal with Showtime. With a bundle, users have an option to get two services for more than the cost of one, but less than the previous cost of the two.
According to the Wall Street Journal and subscriber-measurement firm Antenna, a bundle decreases the chance that a user will cancel a streamer. Reportedly, users of a single streamer may binge-watch a particular series and then cancel before the following month.
While not specifically stated, presumably users with a bundle are more likely to move to binge watching other shows, because there is a greater number and variety available to them.
Even Netflix, whose library is rivaled only by Disney+, has already become part of a bundle. Netflix is now available alongside Max — which was itself originally HBO Max and Discovery+ — in a deal with Verizon.
Antenna says that cancelling users of Apple TV+ and Paramount+, or the "churn rate," was 7% in October 2023. That compares to an industry average of 5.7%.
While streamers themselves do not report their churn rate, Antenna claims that Disney has seen fewer cancellations since it has been offering Disney+, Hulu, and ESPN in a bundle.
Apple itself already bundles Apple TV+ in its Apple One service, where it is sold in a package together with Apple Music, Apple Arcade, and Apple News. Again according to Antenna, Apple One has an unspecified but far lower churn rate than Apple TV+ on its own.
Bundles may be useful to Apple because its Apple TV+ library of shows remains one of the smallest in the industry. A bundle would also be more attractive to subscribers, which may be particularly important after Apple — and practically all streamers — have been raising their prices.
Oliver Haslam
Andrew O'Hara
Charles Martin
Wesley Hilliard
Marko Zivkovic
Malcolm Owen
Andrew Orr
33 Comments
Still think Apple getting into streaming TV was a mistake and this may be pointing to a future "I told you so" moment.
If Apple wants to get serious they could buy the company that owns Paramount and get a huge library of Viacom, CBS and Paramount content. The CBS television network which includes a news division and a sports division. A laundry list of channels. The Pluto ad supported streaming service.
The collection of satellite/cable channels cover children, music, sports, comedy and much more.
By ownership of CBS they get a significant package of College & NFL Football, College Basketball to include March Madness and other sports properties.
Paramount is controlled by a private company called National Amusements that could likely be bought for pocket change. The public shares are currently less than $10 Billion, so it would be an easy pickup if Apple wants to go there.
Paramount would do much better without the meddlesome Redstone family.
Want to reduce churn then lower the cost of signing up for a full year. Ad-supported options also work. Netflix here in Canada costs $5.99 a month ad-supported and at that price keeping it year-round makes a lot of sense. Paramount+ is the one streaming service I don’t have and, frankly, it’s just not worth the bother considering how much else is being offered up by all the other services. If you already have Prime, Apple TV+, Netflix, and Max (Crave here in Canada), who would have time to watch whatever lesser programming that is served up by Paramount+. There is a lot more value in getting Apple TV+ than Paramount+ and if you bundle Apple TV+ with Paramount+ for a few dollars more, that’s just not an appealing offering.
It’s simple, really, if streaming services don’t want consumers to only carry their services for part of the year, stop overcharging. Most of us have a hard limit on how much we’re comfortable spending on TV content. Streaming services need to operate with that limit in mind. We’re all getting squeezed from so many directions these days - groceries, housing, transportation and so on - that to just keep paying more and more for something to watch on TV is truly aggravating. In my youth, you put up an antenna, hooked it up to your TV and away you went. Maybe we had to wait a year or so for Hollywood movies to land on network TV and they were broadcast with annoying commercials. Yet, once you paid for that antenna - $100 or so - it was cost-free. Saw a lot of great, classic Hollywood fare that way back in the 1960s and into the 1970s. Today . . .
I think people misunderstand what Apple (& also Amazon) is selling here. it isn’t AppleTV, it’s Apple One where AppleTV is seen as a loss leader for a bundle that includes non-TV offerings.
In my case, I am getting dependable iCloud BU, Apple Music, Apple News (which allowed me to cancel several magazine subscriptions), Apple Fitness as well as AppleTV for myself and my wife. The only thing we don’t use is Apple Arcade since we don’t play games.
Apple doesn’t need to buy old media at an enormous cost. Apple just needs to keep doing what it does. This is especially true if the future of spectator sports and entertainment is a more immersive AR/VR format that will need to be created anew. The attention span economy is already stretched to the point where owning large troves of legacy media just does not make really any financial sense.
So Apple isn’t going to be buying Disney. Sorry.
Analysts seem to not understand what Apple wants to achieve here.
I think an ad-supported tier would reduce churn more than bundling. But these are both probably the future of streaming.