A still from "House of the Dragon," which could help to fuel retention for Disney and Max's bundle.
Theo Whiteman/HBO
Early data shows the Disney and Max bundle beats Netflix in terms of subscriber retention.
Three months after its launch, 80% of subscribers stuck with Disney and Max.
With Netflix dominating, analysts have predicted a "mega-bundle" could arrive in the coming years.
New data suggests there's one clear way streaming services can compete with Netflix: bundling.
A power-in-numbers approach could pose a threat to Netflix's unrivaled loyalty in the streaming market.
In terms of subscriber retention, the Disney and Max bundle — which launched in July and starts at $17 — came out on top in the months following its launch, according to new data from the analytics company Antenna.
From July to September 2024, 80% of subscribers stayed with the service. That put it ahead of Netflix, which kept 74% of customers over the same period.
Disney's in-house bundle — without Max — also trounced individual services like Hulu, Disney, and Max in terms of retention.
While that's still a fraction of Netflix's 300 million, EMARKETER analyst Ross Benes said "aggressive" bundling had kickstarted growth at WBD, where US subs have remained flat "even after adding live sports."
"Bundles viewers tend to pay a lower price, thus generate lower [average revenue per user] generally," Benes said, "but bringing them into the fold expands audience reach."
Analysts have previously touted bundling as a prospective remedy to Netflix's dominance.
A mega-bundle of streaming services could soon materialize, TD Cowen analysts predict.
The analysts argue it's a better model for traditional media companies and customers alike.
However, market leader Netflix may not need to bundle — at least in the short term.
Traditional media companies that have launched stand-alone streaming services should pivot hard, TD Cowen analysts argued in a recent report.
The analysts say Warner Bros. Discovery, Disney, and Paramount should return to the wholesale business rather than continuing to build direct-to-consumer products.
Their overall vision is a "mega-streaming bundle" distributed by Apple, Amazon, Google, or cable companies like Comcast.
"Everyone's producing more content than they used to," Doug Creutz, a senior research analyst at TD Cowen, told Business Insider. "Everyone's advertising for their content more than they used to, and consumer dollars haven't increased that much."
A bundle would help players spread the risks associated with content marketing and production. Creutz said he foresees a bundle happening in the next two to three years.
"Bundling is the right way to go," Wedbush Securities managing director Michael Pachter told BI, similarly predicting a three-year timeframe. Pachter said a bundle would aid content discovery in a fragmented content landscape and make subscriptions stickier.
TD Cowen predicted that WBD and Disney would see single-digit DTC profitability in 2025 and that Paramount and Comcast would reduce their DTC losses.But Creutz said the picture isn't improving enough to make these DTC efforts the best path forward. He said Disney+ had already expanded into essentially all the markets it can — though its standalone ESPN product remains an open question — and Comcast and Paramount still aren't close to DTC profitability.
Creutz added that streaming services are trying to reach profitability by variously cutting spending, increasing ad loads, and raising prices.
"You're heading to a place where the consumer experience is getting significantly worse," Creutz said.
A potential obstacle to Netflix's world domination
The big player that doesn't need to bundle imminently is Netflix, which appears to be the clear winner of the streaming wars. (Apple and Amazon exist somewhat separately, Creutz added, given their streamers are tied to other business objectives.)
Netflix recently reached a larger market cap than Comcast, Disney, Paramount, Fox, and WBD combined, as media analyst Rich Greenfield noted.
A Netflix spokesperson pointed BI to its Q3 shareholder letter, which said the breadth of its content made bundling unnecessary — unlike for competitors.
That doesn't mean Netflix couldn't be impacted by a potential mega-bundle, however. Creutz said that while Netflix has a "huge advantage" competing against streamers individually, a mega-bundle "could be an obstacle to their path to world domination."
And Pachter said bundling could be welcomed by Netflix if the streamer could dictate the terms.
Disney is another company that complicates the picture. Creutz said the Mouse House harbors ambitions of being the last man standing with Netflix, and if its stand-alone ESPN product succeeds, "then I think their need for other people diminishes." Disney also offers its own in-house bundle of Disney+, Hulu, and ESPN+.
Creutz acknowledged that assembling a bundle would be difficult, likening it to "herding cats." Other outstanding factors include David Ellison's plans at Paramount, and the speed of linear TV deterioration.
There could also be regulatory challenges. TD Cowen referred to recent developments at Venu as "a step backwards," after ESPN, Fox, and WBD killed the sports streaming venture amid legal headwinds.
For his part, Pachter said he felt a bundle hadn't happened yet because of inertia.
"Everybody's too inwardly focused and looking at the past," he said.
YouTube TV will cost close to $83 a month after a just-announced price hike.
That's a far cry from the $35 a month it was when it launched in 2017.
However, YouTube TV is arguably still attractive relative to some other pay-TV offerings.
The price of YouTube TV is going up again — and cord-cutters around the internet are up in arms.
Google announced Thursday that the cost of its popular pay-TV service is now $82.99 a month for new users, up from $72.99. Existing users will see the price hike start on January 13, so some might not pay more until February.
The last time the service raised prices was in March 2023.
YouTube TV is now roughly in line with a typical pay-TV bundle and will cost exactly as much as rival service Hulu + Live TV, which includes ad-supported versions of Hulu, Disney+, and ESPN+.
YouTube TV's price has grown dramatically in the nearly eight years since it launched, though that's largely because the service was underpriced at first relative to its offering.
Before this hike, YouTube TV was generally cheaper than many rival streaming TV packages from competitors such as Hulu + Live TV, Fubo TV, Spectrum, and DirecTV. (Many pay-TV services have a variety of plans, so it can be difficult to truly compare apples to apples, however.)
YouTube TV also has a slick interface that appeals to many cord-cutters.
Although YouTube TV's price growth has been eye-popping, the price of pay-TV services — from cable to satellite to streamers — has generally outpaced inflation, per data from the US Bureau of Labor Statistics. That includes the largest inflation surge in decades.
As the cable bundle became more expensive, millions of households cut the cord. TV networks make less money when pay-TV subscriptions fall, so to keep investors happy, they've increased the amount they charge TV providers, who then pass those costs on to customers.
In other words, when fewer people pay for TV, the remaining subscribers pay more. That has created a flywheel effect, with customers fleeing the bundle even faster in favor of streaming services, social media, or other forms of entertainment.
When asked for comment, a YouTube TV spokesperson issued a statement that acknowledged this dynamic: "To keep up with the rising cost of content and the investments we make in the quality of our service, we are increasing our Base Plan price for YouTube TV from $72.99/month to $82.99/month."
Google may also have raised YouTube TV prices to help cover its investment in NFL Sunday Ticket. The tech giant won the right to distribute the premium out-of-market package starting in 2023 and priced it at $379 per season for YouTube TV customers and $479 for others. Even at those prices, media analysts at Morgan Stanley don't think the service is profitable.
Still, despite the price increase, YouTube TV can often be one of the better deals in town for those who want a large bundle of channels. And it has another thing going for it: It's easy to cancel and resubscribe to.
"We give all members the flexibility to cancel their membership at any time," the YouTube TV spokesperson said in their statement.
