Apple and Paramount in bundling talks: How can players survive the streaming wars?

Apple and Paramount have made waves within the global media industry recently as they are reportedly in talks to bundle their streaming services.

According to the Wall Street Journal, the deal would come in an offering that would cost less than subscribing to the platforms separately.

Don't miss: Apple and Paramount reportedly in talks to bundle streaming services

MARKETING-INTERACTIVE has reached out to Apple and Paramount for a statement.

The report comes after the industry players initiated plans to combine their streaming services. For example, back in November, streaming giant Netflix and Warner Bros. Discovery’s Max reportedly inked deals with Verizon to bundle the two services at US$10 a month, much less than the US$17 when consumers pay for the two services separately, according to the Wall Street Journal.

As consumers increasingly shift away from traditional television and embrace streaming services and connected devices, advertisers are poised to follow suit, aligning their strategies with the changing media landscape.

Potential reasons behind the move

Industry players MARKETING-INTERACTIVE spoke to believed that this trend highlighted the increasing awareness of consumer subscription fatigue.

As an increasing number of consumers shift from traditional linear formats to various digital video platforms, there exists ample space in the ecosystem for both subscription-based (SVOD) and ad-supported (AVOD) services, according to Nicole Scaglione, vice president, OTT and CTV, PubMatic.

“The key takeaway is the essential demand for affordable streaming alternatives, particularly as macro-economic conditions persist in putting pressure on household finances,” she added.

In fact, streaming firms have just come to understand how challenging it is to run and sustain a lucrative streaming company. Caterina Camerata, client lead Asia Pacific, Publicis Media said this convergence brings pre-streaming TV back to the days of cable TV.

“It will give marketers the chance to reach larger audiences and purchase several inventory items simultaneously, in addition to guaranteeing that smaller content producers can operate profitably,” she added.

Furthermore, having access to more content selections at a fair price would encourage viewers to stick with their current subscription, which will lessen volatility and help maintain stable audiences, she said.

How will this impact the media landscape?

As the streaming wars rage, it is not surprising to see some of the biggest streaming players look to join forces to dethrone other streaming giants. 

Moving forward, media companies will focus on offering diversification based on the demand from different segments for, among other things, ad-free experiences, premium or niche content kinds, and fresh material will probably be used to achieve this, said Publicis’ Camerata.

“More adjustable subscription tiers will be the outcome, to maximise the profitability of every audience group,” she said.

Furthermore, she believed that media companies will increase their investments in formats and experiences that enhance the product's appeal to advertisers, such as more immersive and interactive formats and flexible inventory buying models, in light of the renewed emphasis on advertising as a revenue stream.

On the other hand, TV advertising will become more accessible to a wider array of advertisers, potentially diverting budgets from search and social advertising, said PubMatic’s Scaglione.

“The evolution of advanced measurement tools for campaign outcomes and the streamlining of TV buying through programmatic platforms will further broaden the appeal of TV advertising, particularly for performance-focused advertisers seeking optimal results,” she added.

In fact, OTT platforms have been facing multiple challenges in recent years such as consumers being extremely price sensitive, and the cost of acquiring a subscriber and retaining them can be almost as much as the annual subscription revenue per customer, according to Ranga Somanathan, co-founder at RSquared Global Ventures.

On the media front, he said that consolidation leading to shared content library, enhanced distribution and lower subscription when complemented with an ad supported model will make the business viable over the long run.

“For advertisers, who are being starved of audience attention and faced with inflationary media cost, will be able to extend their advertising to premium environments,” he added.

Related articles:

Netflix ramping up its gaming offerings: What more can be done for breakthrough?
Streaming platform iQIYI launches mini-series with Grab MY