TV’s “Great Rebundling” is not what you think

For as long as I’ve been writing about cord-cutting, people have been insisting the whole effort is pointless.

Ah, but you don’t really want to pick and choose your own streaming services, these wise industry observers have told us. What you really want is one big subscription that ties everything together—you know, like cable.

This attitude seems to be the driving force behind “The Great Rebundling,” an industry buzzphrase that suggests a return to cable-style packaging for streaming services. The term most recently appeared in a Wall Street Journal story last week, which suggested that the thing you hated most about cable is now coming back.

A closer examination reveals this claim to be bogus. Despite what you may have read, consumer choice in streaming TV remains alive and well.

The rebundling that wasn’t

Given the WSJ’s influence, I feel compelled to play media critic for a moment and dig a bit deeper into that story’s claims.

Let’s start with the headline: “You Hated Your Cable Package. Your Streaming Services Are Bringing It Back.”

That sounds pretty scary, especially if you ditched cable to get more control over your TV spending. But upon reading the actual story, it’s really just conflating a handful of developments that look nothing like a revival of cable’s business model:

• Amazon, which already offers a marketplace for video services, has reportedly considered bundling some of them together at a discount. It’s a fine idea—provided it’s optional—but most popular streaming services aren’t available through Amazon’s marketplace to begin with, so any bundling options would be limited. (Amazon executives have also talked up potential bundle deals for years, and nothing has ever come of it.)
• Warner Bros. Discovery has reportedly discussed working with rival streaming services on some kind of bundle, but the Journal’s story offered no specifics. Meanwhile, CNBC’s Alex Sherman reported last week that this kind of cross-company bundling is unlikely to happen anytime soon, noting that NBCUniversal recently approached some rivals with this idea and was rejected by pretty much all of them.
• As we’ve seen with wireless carrier streaming deals, some companies outside of the TV business have been offering free or cheap streaming services to their customers. This isn’t a new trend, though, and it’s more of a replacement for cable’s double- or triple-play deals than a re-creation of cable-style channel packaging.

Even the Journal seems to acknowledge that its reporting doesn’t back up its headline, noting six paragraphs in that “no one in the streaming industry anticipates stitching all the big services together into a $100-a-month package.” But if you only read the headline, skimmed the story, or got blocked by a paywall, you might’ve come away with an entirely different impression.

One bad bundling trend

If there is one consumer-hostile trend to watch out for, it’s that of streaming service consolidation.

Warner Bros. Discovery, for instance, has indicated that it will combine its HBO Max and Discovery+ streaming services in 2023 and may also raise prices—the all-too-predicable outcomes of a merger between those services’ parent companies. Paramount has also considered merging its Paramount+ and Showtime services, and Disney’s CEO has floated the idea of a “hard bundle” for Disney+ and Hulu.

This kind of mandatory, inter-company bundling would be bad for consumers, which is why I’ve railed against the mindless industry megamergers that make it possible.

But in the end, these companies still must answer directly to customers, and they may find that mandatory bundling doesn’t work as well as it did in the cable era. The Disney bundle is successful, for instance, because people can see the value compared to paying separately for Disney+, Hulu, and ESPN+. When a la carte options disappear, so does the perceived value of bundling services together. And with so many options for TV, streamers can only push customers so far before they cancel their subscriptions.

People want choice

Of course, there’s nothing wrong with bundling per se. If the TV industry could package their services in ways that save customers money while maintaining flexibility, that’d be great.

But all signs suggest that this won’t happen. With cable, for instance, TV networks had numerous chances to embrace smaller, more flexible bundles that would keep customers happy and slow cord-cutting down. At every turn, they’ve opted for bigger, less flexible, more expensive bundles instead.

Customers have responded by abandoning those bundles for cheaper a la carte streaming services. Now that they’ve had a taste of that flexibility, I doubt consumers will have much interest in returning to bigger packages.

The “Great Rebundling,” then, looks more like a series of modest (and mostly optional) upsell tactics than an attempt to re-create yesteryear’s all-encompassing TV packages. But I’ll admit that doesn’t make for the catchiest headline.

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