The Great Rebundling Builds Up Speed

News comes today that smart TV manufacturer VIZIO is about to join the ranks of aggregators, launching a service called VIZIO Accounts that will allow viewers to subscribe to multiple streaming services, including the newly available STARAR
Z , via their new VIZIO Account.

VIZIO thus joins the ranks of Roku, AmazonAMZN
and major MVPDs like ComcastCMCSA
and FIOS in giving customers a simple way to manage their subscription TV services. In addition to the ability to pay for their subscriptions, users will also have the ability to consolidate their subscriptions and receive exclusive VIZIO-only discounts from those subscription services.

This is very much in keeping with consumer demands. A recent study from Hub Entertainment Research found that a whopping 91% of US consumers wanted some sort of aggregation service.

The reason for that is not hard to understand.

With so many streaming services available—there are nine multibillion dollar SVOVO
D (streaming video on demand) services right now—it’s hard for consumers to keep track of which ones they subscribe to and to manage all those passwords.

More than that though, it’s hard to keep track of which shows are on which services.

With the exceptions of discovery+ and Disney+, the major SVOD services have very similar programming—high quality dramas and comedies along with the occasional movie—and so remembering what service the series your friends told you about is on can be quite a challenge.

That’s why one of the keys to the aggregator system is that viewers are able to access all of the apps they subscribe to from a single interface.

That’s a plus for viewers as it provides a superior UX, but it does raise an issue for SVOD providers in that it allows viewers to skip the home screen on their apps and some of the data that comes with that experience.

Given the level of competition in the space, and the high rates of churn that are being reported, it seems that giving up some ability to collect data in return for more subscribers and less churn will be a worthwhile move for many SVOD services and we can expect to see more OEMs and MVPDs joining the ranks of aggregators.

More Bundling On The Way

From there, it’s an easy step to see how aggregators can offer a larger bundled package.

For OEMs, the model would be Sky UK’s SkyGlass offering.

SkyGlass provides users with a brand new TV set along with a subscription to Sky’s pay TV and streaming service all for a set monthly fee. It’s similar in many ways to how telcos charge monthly fees to lease out smartphones in conjunction with cellular data plans.

Thus, it is easy to see a US manufacturer bundling together various arrays of subscription and free (FAST) services along with an optional linear TV service and offering them, along with a brand new television set, for a monthly lease fee.

Given the low cost of television sets, adding in a monthly rental fee for the TV would not add much to the overall cost, making the new bundles a popular option for consumers. For the streaming services, the carrot would be the ability to lock large numbers of subscribers into place for years—SkyGlass requires a four-year subscription—which would prove an ideal way to reduce churn.

For MVPDs, the obvious addition to the streaming bundle is broadband. MVPDs make the bulk of their money from broadband as it is, and thus have no loyalty to the traditional linear pay TV package, other than as a way to create stickiness. So if a streaming bundle can accomplish the same goal, there’s no reason for them to avoid that path. Especially given that they can likely talk new subscribers into increasing their broadband speed as a way to ensure they can handle all the bandwidth those new streaming services are going to require.

Comcast is particularly well situated in this regard. In addition to being the parent company of Sky and being privy to the workings of SkyGlass, Comcast now makes a Comcast-branded smart TV set that uses their proprietary Flex streaming interface. They even have their own SVOD service and two FASTs (Xumo and the free version of Peacock.) Combine those elements together with broadband and Comcast would seem to have the makings of a very popular streaming bundle.

Smaller MVPDs have options in this regard too, thanks to startups like MyBundle.TV and Paket Media that can help them to assemble streaming-friendly bundles while also helping consumers find services they might like.

The Intrinsic Value of Bundles

If there is a lesson to be learned here, it is not to throw out the proverbial baby with the bathwater.

While the old system of overstuffed and overpriced cable bundles may have been highly inefficient and unpopular with consumers, the idea of bundling itself remains popular, especially as a way to manage the complexity of the new streaming ecosystem.

By handling the creation of these new bundles in a more transparent and consumer-friendly manner, the new aggregators can build products that work for consumers and programmers alike.