Netflix, Apple to Offer Subscription Bundles as Consumers Fight Rising Costs
By Movieguide® Contributor
While the price for streaming services has ballooned in recent years, consumers may soon find reprieve through subscription bundles that heavily discount costs.
Verizon recently launched a subscription bundle for the ad-tier version of Netflix and Max priced at $10 per month, discounting $7 per month from the non-bundled price of each service. This deal is groundbreaking, as Netflix has long shied away from offering any discount on its standard pricing.
As streaming services have added ad-free and ad-supported subscription tiers, discounts like this are possible and open the door to similar deals in the future. Through the ad-tier level, Netflix makes more money the more people use the site rather than receiving a flat payment regardless of a user’s watch time.
Netflix executives say the basic ad tier makes the company more money per customer than its base ad-free tier.
Because the streaming service can rely on ads to generate revenue, the company can discount the actual subscription cost without taking a major loss in revenue.
As ad-level tiers become popular and streaming services crack down on password sharing to increase profits, the stage is now set for streaming bundles – at the ad-free tier – to appear in abundance.
Apple TV+ and Paramount+ are currently in talks to create a bundle for their services as well. This is surprising as Apple TV+ does not offer an ad-free subscription. However, the company has found success in the past through bundles of its other services.
This newfound willingness of streaming companies to bundle their services offers a much-needed reprieve to consumers struggling with the rising cost of streaming subscriptions. Nearly every major streaming service has raised its subscription cost in the past year – some doing so multiple times.
Earlier this year, the cost to subscribe to the major streaming services topped the price of a basic cable plan, signaling that traditional TV may not be out of the race yet.
Movieguide® previously reported:
In an effort to find profitability after years of losses, streaming services are raising their prices and betting that consumers will stick with them.
According to The Wall Street Journal, the average cost of subscribing to a major ad-free streaming service is increasing by 25% every year. Because these increases are happening across the industry, consumers have no choice but to pay the higher price or switch to an ad-supported tier – which has an even higher upside for streaming services.
The days of switching from cable to streaming to save money are coming to a close. In fact, with the most recent price hikes, the cost of subscribing to a bundle of streaming services has topped the price of a basic cable plan.
“To viewers, the streaming TV era promised convenience and easy availability of all their favorite shows, past and present…And right now, none of this has come to pass,” Ars Technica reported.
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