Verizon (VZ) unveiled a new streaming bundle called "My Plan" that packages Netflix (NFLX) and Max (WBD) starting at $10 per month. The telecom and media giant is the latest to embrace streaming partnerships as wireless carriers and streaming platforms offer new discounted services.
Yahoo Finance Entertainment Reporter Alexandra Canal breaks down the details, examining the potential revenue implications of these discounted deals.
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- Verizon announcing a new streaming bundle packaging Netflix and Max for as low a $10 month. Now bundling is becoming more popular within the media landscape as streamers embrace partnerships rather than competition. For more on this, we turn to Yahoo Finance's Alexandra Canal. Allie, this is feeling-- well, I think that we've heard this story before.
ALEXANDRA CANAL: Yeah, everything old is new again. The bundle is back.
- But there's new details, you break them down.
ALEXANDRA CANAL: Yeah, so it's a little different than what we've seen in the past, though, because now we're seeing the distribution side get involved. We're seeing competitors be bundled together. I mean, bundling is nothing new, but we're certainly seeing that ramp up, especially over the past year or so. There's the Apple One bundle, where you can get Apple Music along with some other Apple services in there. We know Paramount has partnered with Delta Airlines and Walmart+, and that's a bundled subscription as well.
So this is something that's coming about as streamers are really trying to create a sticky environment. They want consumers to stay on the platform. They don't want to lose subscribers. And then, if you go to a company like Verizon, for example, they also don't want to lose subscribers.
If you notice any of the cable companies, whenever they report a loss of internet subscribers, broadband subscribers, that wipes off millions of dollars off of their market cap. So this is a way to create this synergy. And you would think everyone wins, but there are some cons here when you think about the pricing of all of this. Obviously, pricing is one reason to do this, but it could also drag down average revenue per user, metric known as RPU.
So at the end of the day, despite all of these bundles becoming more and more popular, companies like a Netflix or a Disney, they need to figure out more strategic ways to limit their spending in order to make sure that critical RPU number doesn't go down. Because this is a discount. At $10 a month, that's 40% of savings on the part of the consumer. So it's a double-edged sword that, if you're a media company, you have to grapple with.
JULIE HYMAN: What's also fascinating to me about the bundles is they're not customizable anymore. In other words, like, the bets that are being made are not driven by content, they're being driven by strategy. So if I, as a consumer, want this particular program, like what are the chances that the two companies that happen to decide to partner are the ones who's shows I also want?
ALEXANDRA CANAL: That's a very good point.
JULIE HYMAN: So that's also sort of a gamble, maybe. I don't know what-- I mean, like, do we know what consumers decisions are based on now? Is it based on content? Is it based on price? I don't know.
ALEXANDRA CANAL: Well, that's an issue. I think it's based on content in the sense of it's very easy for me to go and cancel my Netflix subscription if the new season of whatever show I'm watching isn't on at that time. Now, I do think there are going to be more opportunities for bundling down the line. All the experts I've spoken with have said expect to see more of this. And it's also a bit of a precursor to some more media M&A to come in 2024. Obviously, right now, it's a little bit of an unfavorable environment.
- That's what we need, more media M&A.
ALEXANDRA CANAL: Yeah. I mean, I think we're going to see this at a certain point. It's a question of when. It's a question of what companies are going to partner together. But this could be a first step in setting that up for the years to come.