Apple and Paramount are reportedly in talks to bundle their streaming services at a discounted price.
The move is aimed at making their offerings more affordable and appealing to consumers, as both companies face increasing competition and customer defections in the streaming industry, The Wall Street Journal (WSJ) reported Friday (Dec. 1), citing unnamed sources.
Neither Apple nor Paramount Global immediately replied to PYMNTS’ request for comment.
Bundling streaming services has become a popular trend in the industry, according to the report. For example, Netflix and Max have partnered with Verizon to offer bundled services. Warner Bros. Discovery has also expressed openness to bundling Max with other streaming services.
Companies are turning to bundling to provide value to consumers, the report said. The strategy has proven effective in reducing customer churn, as subscribers are less likely to cancel when multiple services are included in one package, per the report.
For example, Disney has seen lower rates of subscriber defections among those who have signed up for a bundle of Disney+, Hulu and ESPN+ rather than a single service, according to the report.
Apple currently offers Apple TV+ as part of its Apple One bundle, which includes other Apple services like Apple Music and Apple Arcade. The bundle has a lower churn rate compared to the stand-alone Apple TV+, the report said.
On the other hand, Paramount used to offer a bundle of its own with Paramount+ and Showtime, but the company decided to combine the two into Paramount+ and raised the price of the ad-free tier, per the report.
It was reported in August that streaming services have seen record highs in viewership, making up 38.7% of total U.S. TV use in July. At the same time, the total share of viewers held by traditional broadcast or cable dipped below 50% for the first time.
However, as streaming providers raise their prices, the risk of subscriber cancellations increases.
PYMNTS Intelligence found that price hikes are cited as the most common reason consumers give for canceling subscriptions. According to the April “Subscription Commerce Readiness Report,” a PYMNTS and sticky.io collaboration: “Cost was the most common driver for cancellations, with 56% of consumers canceling a subscription in the previous 12 months for this reason.”
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