Consumers overwhelmed by paying for multiple streaming services will soon have a reprieve.
Legacy media giants Disney Entertainment and Warner Bros. Discovery plan to launch a bundle of Max, Disney+ and Hulu later this summer, the two companies announced Thursday.
A date for the launch and pricing were not disclosed. The service will offer both ad-free and ad-supported subscriptions.
The move is designed to lower subscription cancellations, increase retention and provide a better product for consumers burdened by paying for multiple services, executives for Warner Bros. Discovery said during an earnings call.
The new bundle comes as streaming giants seek to cut costs after years of heavy spending to compete in a crowded market, and as subscriber growth declines across the industry. Subscriptions to premium video-on-demand services increased by 10% in 2023, according to research firm Antenna. This is half the growth from 2022.
But the bundle seems to mimic the exact model streaming supposedly squashed: traditional TV cable packages. Subscribers will pay one flat fee for access to all brands under the service, regardless if they only watch a fraction of them.
During the call, CEO David Zaslav said the bundle was the “first of its kind.”
Credit: John Nowak/Warner Bros. Discovery
Credit: John Nowak/Warner Bros. Discovery
“There likely will be a restructuring of how people view content,” Zaslav told analysts. He added: “I think the business will look very different in two-to-three years. It will be much better for the consumer.”
The bundle will give subscribers access to content from brands underneath the three streaming giants, from Marvel and Pixar to cable giants CNN, TBS and Food Network, according to the announcement.
It is unclear if the bundle will also include sports programming on ESPN+, which is underneath the Disney umbrella, or Atlanta-based TNT Sports, a brand under Max.
However, plans are still on the table for Disney, Warner Bros. Discovery and Fox Corp. to launch a joint sports streaming service in the fall, a measure announced earlier this year. The companies have not detailed how the sports service and the new bundle will function with one another. During an earnings call this week, Fox Corp. CEO Lachlan Murdoch said the venture recently released internal beta tests for the service.
Credit: TNS
Credit: TNS
During the Warner Bros. Discovery call, Zaslav said the company is still in negotiations with the NBA to retain its rights to broadcast games on TNT, a key driver of both ad sales and viewership for the cable brand. Warner pays an average of $1.2 billion annually for the rights, the Wall Street Journal reported this week.
Zaslav said the company has the option to match third-party offers before the NBA reaches an agreement with them.
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