Content overload, rising prices, and commercials. If you thought we've moved on from the cable bundle, think again. Streaming platforms are now recreating the very thing they tried to replace, jacking up prices with streamflation and trying to fight users cutting the cord. This week on Tech Check, how media companies, tech giants, retailers, and even longtime rivals are teaming up to bring back the dreaded bundle.

Content overload, rising prices, commercials.

If you thought that we had moved on from the cable bundle, think again.

Streaming platforms, they're recreating the very thing they tried to displace.

We're going to be right back to the cable

This is like, oh, well, unbundle everything, split it up.

People are cutting the cable TV bundle, and now some streamers are starting to re-bundle.

When is our streaming nightmare gonna end?

This week on Tech Check, the great re-bundling.

The original appeal of the direct-to-consumer streaming apps, easy to use, easy to afford.

$5 a month for Netflix was a lot cheaper than the $60 a month for Xfinity or Spectrum's host of channels.

The average cost of a major ad-free streaming service has increased by nearly 25% in the past year alone.

Netflix went from $10 a month and then $15.50.

And then there's Max going from $15 to $16.

The average household, it has 4 different services.

And the edge streamers did have is going away.

You see 1 platform raise its prices, but then, you know, you might think it's just a dollar or 2, but they're all doing it.

Streaming services that includes Disney Plus, Hulu, Netflix and Peacock, that would cost $87 a month.

That is more than the average cable TV package, which costs $83.

Now with streamflation, as each of these individual services has gotten more expensive, If you are going to bundle them together yourself, you may actually end up paying more.

A bundle by any other name, that's still a bundle.

The price hikes were part of a broader economic reset as interest rates soared after the pandemic and the era of free money ended.

Media giants like Warner Brothers and Disney they began to crack down focusing on cost cutting and efficiency.

Now the industry is emerging from this growth at all costs model to 1 that's envisioning profitability.

Companies like Disney they were losing millions of dollars every quarter on their streaming businesses.

And then they realized that they had to jack up prices to stop the bleeding.

You look at how much revenue ESPN generates versus ESPN Plus, and you have a fair idea of how tough it is to be a streamer in this age, especially when every single major company has its own streaming platform.

Another appeal of streaming services, no ads.

As Netflix, HBO, Disney, they all begin offering ad-supported tiers.

Streamers basically just learning what cable companies knew all along.

They make more on a viewer watching ads, even if the monthly fee for subscribers is way lower.

The monthly revenue from the ads was so great that the ARPU, or the average revenue per user for the ad-supported people paying $5 less a month, was actually higher, and materially higher, than the ARPU for those who were taking the no-ad version.

Netflix, too, has said that they make more on members with the app plan.

It's kind of a win-win because it's a lower price option for our members and it's both kind of incremental revenue, incremental profit for the business.

As Yogi Berra put it, deja vu all over again.

The commercials and expensive monthly fees of the cable bundle days, they're back.

It's why more and more viewers are starting to cut the cord.

Research shows that Some 35 million users canceled their subscriptions to a streaming service in the second quarter of this year, while only 37.5 million signed up.

That's a net addition of just 2.6 million.

People can just sign up for 1 month, watch everything they want of a new hit show, whatever it might be, the bear on Hulu, and then cancel it for the next 11 months.

That kind of behavior, it has increased an average of 35% from last year.

The risk now is that those higher prices could drive churn, especially if consumers are disappointed by just how little new content is added this fall.

Netflix has been relatively insulated, continuing to invest in originals or striking deals to license content from others.

It's why Netflix is flourishing and taking market share while their peers are slowing down.

But Paramount+, Peacock, Max and Apple TV, they're seeing some of the highest rates of churn.

Part of it is because content is hard to find.

There's people that are, you know, not Luddites or whatever.

They're like, I can't find what I wanna watch because everything's all spread out.

A streaming service has to continuously generate new must-see shows or movies just to keep you from cancelling.

These services need to create enough content to keep you there all year.

Most of the media companies right now, legacy media companies, are seeing them reduce content spend, cut back pretty dramatically in order to get to profitability.

It's a lot of pressure for a single streamer and it's why many are looking to new partnerships with old rivals.

The great bundling is complicating the once straightforward streaming landscape and creating once unheard of alliances.

Long time rivals are teaming up through deals of all shapes and sizes and we'll try to break it down for you.

There are the bundles owned by a single company So under 1 umbrella like Disney, ESPN and Hulu.

Then there are licensing deals like Netflix's earlier this year with Warner Brothers for older HBO titles.

Verizon's latest deal combines 2 competing streaming platforms.

Verizon announced a bundle deal for the ad tiers of both Netflix and Max for $10 a month.

That's a 40 percent discount compared to their standard prices.

Instacart is bundling Peacock, Walmart with Paramount.

Even 2 competing platforms may be getting together.

Apple and Paramount in talks reportedly to bundle into a cheaper package, according to the Wall Street Journal.

The 2 have among the highest churn rates in the industry.

Apple TV Plus and Paramount Plus both have more than 7 percent churn.

That's ahead of the industry average of 5.7%.

And they could use the help with their content.

Both of them have relatively less new content specifically for streaming than some of the other services, obviously like Netflix and maybe even Max.

Apple TV's library, it is the smallest, just about a tenth of the content of the next Disney+.

You might sign up for Apple TV Plus to watch the morning show, but then once you've gone through all their other shows, what's gonna keep you around?

Adding Paramount's lineup, including the film studios, CBS, and the newly added Showtime Library, that would be a way to reduce churn.

It could also hint at an even bigger coming sea change.

Launching the streaming services was just the first step.

And the final could be M&A if some of these partnerships work out.

Over time, streaming needs to migrate towards these big tech platforms.

And I thought breakups and sales of libraries, sales of sports assets is the way that's going to happen.

Paramount or parts of it have long been a potential acquisition target.

There have been a lot of speculation about who might be interested in buying up some of those pieces of Paramount.

Rumors have long swirled of Warner Brothers merging with CNBC parent company NBCUniversal or Apple buying Disney, Lionsgate or Paramount.

Certainly these partnerships, these kind of synthetic bundlings may be kind of a partial step.

Regulatory approval, that's likely to be a hurdle.

What's old is new again and the bundle is back.


Speaker 0: Content overload, rising prices, commercials. If you thought that we had moved on from the cable bundle, think again. Streaming platforms, they're recreating the very thing they tried to displace.

Speaker 1: We're going to be right back to the cable

Speaker 2: set up.

Speaker 3: Yes, we will be.

Speaker 1: This is like, oh, well, unbundle everything, split it up. Yeah, not really.

Speaker 4: People are cutting the cable TV bundle, and now some streamers are starting to re-bundle. Kind of amazing.

Speaker 5: When is this gonna end? When is our streaming nightmare gonna end?

Speaker 0: This week on Tech Check, the great re-bundling. The original appeal of the direct-to-consumer streaming apps, easy to use, easy to afford. $5 a month for Netflix was a lot cheaper than the $60 a month for Xfinity or Spectrum's host of channels. But lately streamflation has hit hard. The average cost of a major ad-free streaming service has increased by nearly 25% in the past year alone.

Netflix went from $10 a month and then $15.50. Paramount Plus from $10 to $20. Disney Plus from $8 to $14. And then there's Max going from $15 to $16. The average household, it has 4 different services.

And the edge streamers did have is going away.

Speaker 6: You see 1 platform raise its prices, but then, you know, you might think it's just a dollar or 2, but they're all doing it. So it really adds up.

Speaker 0: So paying for a basket of the top U.S. Streaming services that includes Disney Plus, Hulu, Netflix and Peacock, that would cost $87 a month. That is more than the average cable TV package, which costs $83.

Speaker 7: Now with streamflation, as each of these individual services has gotten more expensive, If you are going to bundle them together yourself, you may actually end up paying more.

Speaker 0: A bundle by any other name, that's still a bundle. The price hikes were part of a broader economic reset as interest rates soared after the pandemic and the era of free money ended. Media giants like Warner Brothers and Disney they began to crack down focusing on cost cutting and efficiency.

Speaker 2: Now the industry is emerging from this growth at all costs model to 1 that's envisioning profitability.

Speaker 0: Companies like Disney they were losing millions of dollars every quarter on their streaming businesses. And then they realized that they had to jack up prices to stop the bleeding.

Speaker 2: You look at how much revenue ESPN generates versus ESPN Plus, and you have a fair idea of how tough it is to be a streamer in this age, especially when every single major company has its own streaming platform.

Speaker 0: Another appeal of streaming services, no ads. Well, that's going away too. As Netflix, HBO, Disney, they all begin offering ad-supported tiers. Streamers basically just learning what cable companies knew all along. Advertising is a money printing machine.

They make more on a viewer watching ads, even if the monthly fee for subscribers is way lower.

Speaker 3: The monthly revenue from the ads was so great that the ARPU, or the average revenue per user for the ad-supported people paying $5 less a month, was actually higher, and materially higher, than the ARPU for those who were taking the no-ad version.

Speaker 0: Netflix, too, has said that they make more on members with the app plan.

Speaker 3: It's kind of a win-win because it's a lower price option for our members and it's both kind of incremental revenue, incremental profit for the business.

Speaker 0: As Yogi Berra put it, deja vu all over again. The commercials and expensive monthly fees of the cable bundle days, they're back. They're just online this time. It's why more and more viewers are starting to cut the cord. This time on streaming services.

Research shows that Some 35 million users canceled their subscriptions to a streaming service in the second quarter of this year, while only 37.5 million signed up. That's a net addition of just 2.6 million. The industry calls it churn.

Speaker 4: People can just sign up for 1 month, watch everything they want of a new hit show, whatever it might be, the bear on Hulu, and then cancel it for the next 11 months.

Speaker 0: That kind of behavior, it has increased an average of 35% from last year.

Speaker 7: The risk now is that those higher prices could drive churn, especially if consumers are disappointed by just how little new content is added this fall.

Speaker 0: Netflix has been relatively insulated, continuing to invest in originals or striking deals to license content from others.

Speaker 8: It's why Netflix is flourishing and taking market share while their peers are slowing down.

Speaker 0: But Paramount+, Peacock, Max and Apple TV, they're seeing some of the highest rates of churn. Part of it is because content is hard to find.

Speaker 4: There's people that are, you know, not Luddites or whatever. They're like, I can't find what I wanna watch because everything's all spread out.

Speaker 0: And it's expensive to make. A streaming service has to continuously generate new must-see shows or movies just to keep you from cancelling.

Speaker 8: These services need to create enough content to keep you there all year. Most of the media companies right now, legacy media companies, are seeing them reduce content spend, cut back pretty dramatically in order to get to profitability.

Speaker 0: It's a lot of pressure for a single streamer and it's why many are looking to new partnerships with old rivals. The great bundling is complicating the once straightforward streaming landscape and creating once unheard of alliances. Long time rivals are teaming up through deals of all shapes and sizes and we'll try to break it down for you. There are the bundles owned by a single company So under 1 umbrella like Disney, ESPN and Hulu. Then there are licensing deals like Netflix's earlier this year with Warner Brothers for older HBO titles.

Verizon's latest deal combines 2 competing streaming platforms. A new frontier in telco rebundling.

Speaker 1: Verizon announced a bundle deal for the ad tiers of both Netflix and Max for $10 a month. That's a 40 percent discount compared to their standard prices.

Speaker 0: Even retailers are trying to break in. Instacart is bundling Peacock, Walmart with Paramount. Even 2 competing platforms may be getting together. Apple and Paramount in talks reportedly to bundle into a cheaper package, according to the Wall Street Journal. The 2 have among the highest churn rates in the industry.

Speaker 7: Apple TV Plus and Paramount Plus both have more than 7 percent churn. That's ahead of the industry average of 5.7%.

Speaker 0: And they could use the help with their content.

Speaker 5: Both of them have relatively less new content specifically for streaming than some of the other services, obviously like Netflix and maybe even Max.

Speaker 0: Apple TV's library, it is the smallest, just about a tenth of the content of the next Disney+.

Speaker 7: You might sign up for Apple TV Plus to watch the morning show, but then once you've gone through all their other shows, what's gonna keep you around?

Speaker 0: Adding Paramount's lineup, including the film studios, CBS, and the newly added Showtime Library, that would be a way to reduce churn. It could also hint at an even bigger coming sea change. Launching the streaming services was just the first step. Partnerships are second. And the final could be M&A if some of these partnerships work out.

Speaker 5: Over time, streaming needs to migrate towards these big tech platforms. And I thought breakups and sales of libraries, sales of sports assets is the way that's going to happen.

Speaker 0: Paramount or parts of it have long been a potential acquisition target.

Speaker 7: There have been a lot of speculation about who might be interested in buying up some of those pieces of Paramount.

Speaker 0: Rumors have long swirled of Warner Brothers merging with CNBC parent company NBCUniversal or Apple buying Disney, Lionsgate or Paramount.

Speaker 5: Certainly these partnerships, these kind of synthetic bundlings may be kind of a partial step.

Speaker 0: Regulatory approval, that's likely to be a hurdle. But 1 thing remains true. What's old is new again and the bundle is back.

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The Great Rebundling: How streaming platforms are recreating what they tried to replace