Yahoo Finance Disney, Warner Bros. try to 'follow the consumer' with yet another streaming bundle
Warner Bros. Discovery (WBD) and Disney's (DIS) newly announced streaming bundle is the latest attempt from media companies to appease a more fickle subscriber.
"Ultimately, you've got to follow the consumer," WBD CEO David Zaslav said during the company's first quarter earnings call on Thursday. "We need to come together ourselves and provide a better consumer experience, a more compelling and exciting offering, or there will be other companies who'll do it for us."
The bundle, announced late Wednesday, will bring together Disney+, Hulu, and Max streaming services with a launch date set for this summer in the US. Customers will be able to sign up for the package, with or without ads, on any of the three platforms.
Although pricing has not yet been disclosed, WBD management said on the call the service "will be priced very attractively for the consumer" with the Hulu and Disney+ $9.99 ad-supported bundle ($19.99 for ad free) serving as the baseline.
The developments come as media companies face pressure from investors to scale their streaming services and achieve profitability. At the same time, the companies are dealing with more competition from tech giants like Amazon (AMZN) and Apple (AAPL), which are gobbling up streaming deals.
The consumer has also become more picky. On average, US consumers subscribe to four streaming services and spend about $61 per month, according to the latest Digital Media Trends report from Deloitte. That means fewer opportunities to retain loyal subscribers over time.
Zaslav said the upcoming bundle will lead to several benefits for the company, including incremental subscriber growth and longer-term retention.
"The ability for us and Disney together to reach out to consumers, it's a stronger business," he said.
The concept of bundling isn't new. Companies in the space have been doing it with their own services for years. Apple, for instance, offers Apple One, which combines Apple TV+ with other services like Apple Music and Apple Arcade. The bundle launched globally in late 2020.
Disney, which has also been offering a bundle with Disney+, Hulu, and ESPN+, officially began its domestic rollout of a one-app experience late last year that incorporates Hulu content via Disney+ — a similar play to Paramount's Showtime combination as well as the integration of HBO Max and Discovery+, which both merged their respective services last year.
The move toward partnerships among competing media companies, though, has gained traction.
Earlier this year, Warner Bros. announced a sports streaming partnership with Disney's ESPN and Fox (FOXA), set to debut later this fall. In December, WBD partnered with Netflix (NFLX) on a $10, ad-supported bundle offered through Verizon (VZ).
On Thursday, Zaslav said the Netflix partnership "is doing much better than expected," citing its success as "another example where there's more strength together." The company has also already done a slew of international partnerships and bundles with telecom, mobile, and broadband players overseas.
The move to increased bundling represents "a generational disruption," according to Zaslav. "Ultimately, I think the business will look very different in two to three years. And it will be much better for consumers."
Alexandra Canal is a Senior Reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and email her at alexandra.canal@yahoofinance.com.
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