In a rapidly evolving streaming landscape, content providers are increasingly embracing re-bundling as a strategy to enhance customer retention and streamline the user experience.

Kristen Hanich, Research Director at Parks Associates, shares her insights:

Would content providers welcome re-bundling?

• Content providers are welcoming re-bundling. Those operating in the direct-to-consumer space already see partnerships as a key component of their customer acquisition and retention services, with benefits including reducing churn, removing friction from the sign-up process, and enhancing brand awareness and market reach. Consumers have for a long time associated operators with video content, and SVOD bundling is a natural fit in terms of customer expectations. Operators have another advantage in their massive customer bases, which acts as a key marketing funnel.

• Re-bundling has another benefit in that it creates more stable revenue flows for a lot of companies. Parks Associates research shows that in the a la carte, direct-to-consumer space,  customers sign up for one or several months just to watch a specific show or series, and then churn away. That ends up creating boom-and-bust cycles that can be tricky for content providers to work with. Bundling creates more stability.

How likely is consolidation among regional and global SVoDs?

• It’s highly likely that we will see consolidation until the SVOD market reaches profitability. In the past decade, low interest rates created an environment where streaming companies didn’t need to earn a profit in order to create value for investors – they only needed to show that they had enough of a customer base to hypothetically earn a profit at some unspecified date in the future. With interest rates back to historical norms, investors expect better returns, and so streamers need to actually put their money where their mouths have been and show results.

• The big challenge that SVODs and streamers as a whole are running into is that consumer spending is increasingly constrained. We’ve already seen in the US market that consumers have been steadily cutting spending, with consumer-reported spending $10 less per month in 2024 than 2023 and $30 less per month compared to 2021. Service stacking on the whole is down as consumers pick and choose what’s most valuable to them. Some companies will be winners and others losers in all of this.

What is the future role of operator aggregators?

• Operators are looking for new ways to engage their customer bases and bring them value. In the US market, and other areas where pay-TV adoption has been on a downward trend, they’re also looking for a substitute. Parks Associates research shows a lot of success for operators to bundle with streaming video and other subscription services, substantially boosting satisfaction as measured by net promoter score (NPS). Parks Associates consumer research shows adding streaming video to a home internet bundle results in a 22 point boost to NPS. Generally, the more services added, the higher the score, as well. So operators are pretty keenly interested in becoming an aggregation platform, in order to boost their own competitiveness.

• Consumers are frustrated by fragmentation, by the sheer number of services they have access to, and by having to manage so many. Without an aggregator, a household that subscribes to, say, eight different services needs eight different accounts and sets of passwords, you put in payment information in eight different spots, and that becomes a lot to manage. There’s a lot of value for consumers in having all of these services in one place, easily managed, and easily accessed. So we see the demand on that side as well.

What role can content discovery play in easing the consumer experience cross a range of subscription services?

• Right now, the streaming landscape is extremely fractured, and consumers don’t really have a great idea of where to access the specific show that they want to watch. Content discovery tools, letting consumers know what’s available and what service offers it, takes the guesswork out of the equation and saves customers from having to search the web and hope someone’s written an updated article.