Executives at Netflix have shrugged off the idea of bundling with another streaming service in order to drive greater subscription and revenue growth, executives affirmed this week.
On a video conference that was streamed by Netflix after the company’s third quarter (Q3) earnings release on Thursday, Netflix co-CEOs Greg Peters and Ted Sarandos said they understood why other entertainment companies were utilizing streaming bundles to grow their services, but suggested that strategy was not one that their company felt was necessary in order to achieve their goals.
Instead, Netflix is focused on producing entertainment-based content and acquiring the rights to live events that can help the service tap into growth opportunities, particularly overseas, Peters and Sarandos said.
“We’re seeing a lot of our competitors use bundles to find growth in their businesses,” Sarandos affirmed during the video conference, which Netflix utilizes in place of a traditional quarterly conference call with investors.
Sarandos continued: “Given the narrow scope of the libraries on these services, and the fairly limited engagement, it makes sense for them to replicate some of the older media models of creating the bundles. But we’re focused on adding more and more value, to the package — amazing series and films and games — at a remarkably low price, and all in one place.”
Over the past few years, streaming bundles have caught on among some services as a way to pair their unique content libraries and offer combined experiences to customers at a lower price point than what each service would cost on its own.
In July, the Walt Disney Company announced it was partnering with Warner Bros Discovery (WBD) on a bundle that brings Disney Plus, Hulu and WBD-owned Max to customers for $17 per month (or $30 per month without ads). Last week, Starz and Britbox announced a joint effort to sell a bundle that costs $15 per month, or 25 percent less than what each service costs on its own.
Netflix has never sold a bundle directly to customers, though some telecom providers and TV services include the streaming service as part of their consumer plans. A handful of companies, including Verizon and Comcast, have so-called “super bundles” that offer Netflix and other video services at discounted price points.
Those super bundles are generally intended to promote added value to consumers who purchase another service, such as broadband Internet or wireless phone service, while helping telecom and TV providers reduce churn and increase customer satisfaction. Bango, a technology firm that specializes in payment processing, has spearheaded the “super bundling” trend among such providers; they work with Verizon, Comcast and others to launch subscription management platforms that allow them to sell Netflix and others on a standalone basis or unique bundles.
Not surprisingly, consumer research from Bango supports the idea of the super bundle: The company has produced a number of reports under the “Subscription Wars” brand that prove consumers are highly interested in streaming bundles, especially if they are sold at a discount.
Netflix appears unconcerned with this: The company has the most-used streaming product in the world, counting 282.72 million global paying subscribers in Q3. Instead of bundles, executives say they want to bring more entertainment and live content to the service in an effort to scale up their operations in other parts of the world, where Netflix commands a lower share of TV time.
“It’s worth noting that our share of viewership in our biggest countries is still less than 10 percent of TV time,” Netflix co-CEO Greg Peters said on Thursday. “We look at this as, there’s a huge opportunity to grow that share by doing what Ted said — invest more in our (content) slate and continue to improve the variety and quality of our offering.”
