The subscription bundle model is picking up traction fast. Publishers are joining forces to reap the benefits of multi-service bundles and potentially increase user numbers.
The takeaways:
- Apple will introduce a new bundle, with all of their TV+ subscribers now able to access CBS All Access and Showtime for $9.99 extra per month.
- The news follows Bloomberg’s move to offer their subscribers free access to sports publisher, The Athletic, as well as their recent announcement of a subscription bundle with tech publisher, The Information.
- The subscription trend has picked up significantly during the pandemic and reached as high as 85% growth in May compared to January. Publishers continue to seize the opportunity to expand their audience and revenue streams.
The benefits: For ViacomCBS and The Athletic, collaborating with companies recently valued at $2 trillion and $22 billion, respectively, can deliver even larger audiences.
- By working with Big Tech conglomerates, publishers have the opportunity to take advantage of a wider distribution funnel.
- CTV has overtaken broadcast networks, and traditional networks such as those under the ViacomCBS umbrella must adjust and invest in their streaming platforms. The partnership with Apple TV+ is a step in the right direction.
- Companies like ViacomCBS and The Athletic can outmanoeuvre their competition via direct channels to thousands of loyal Apple & Bloomberg users.
Publishers and Big Tech on the same team:
Services business models are fast-growing and highly profitable for Big Tech firms like Apple. Partnerships with more established publishers are essential pathways to offering an expansive range of services.
- It appears that Apple will be releasing a new tiered subscription service, Apple One, offering multiple combinations of their various paid services.
- Apple’s partnership with ViacomCBS gives it direct access to a streaming offering which would enable Apple to rival Amazon Prime.
- However, it is not clear at this stage whether the Apple One bundle will include CBS All Access & Showtime. The ViacomCBS platforms currently boast a combined 16.2 million subscribers – an appealing prospect for Apple.
Thinking ahead: Subscription bundling takes the less tried-and-tested approach, presenting an element of risk for all involved.
- The decision to bundle provides a number of benefits to all parties. Given its relative novelty, there are long-term questions regarding the sustainability of the model.
- Bundling requires the attention of a “publisher’s development, audience, marketing and revenue teams” said Lindsay Horrigan, global head of subscriptions of Bloomberg Media, in addition to outlining revenue splits, and marketing commitments for the parties involved
- For these multi-service bundles to be truly successful, there needs to be a significant affinity between all the brands involved. Especially given consumers will demand cost-effective offerings.
Zoom out: The pandemic has fast-tracked many inevitable changes for the media & publishing industries. Recent consumer behaviour indicates that traditional media publishers must embrace modern services to stay relevant. In remains to be seen if the transition to subscriptions will become a lasting solution for publishers.
