After years of false starts, TV’s great re-bundling is happening in earnest; but instead of the savings streaming services are promising, it might just lead to higher prices.
Starting this summer, Disney and Warner Bros. Discovery will sell a bundle of Disney+, Hulu, and Max, presumably for less than the cost of getting each service a la carte. While we’ve seen some modest attempts at bundling streaming services before—most notably from wireless carriers—this is the first time rival programmers will cooperate directly to offer their services at a discount. In a press release, one Warner executive called the Disney collaboration “a powerful new roadmap for the future of the industry.”
Other players are already showing their hands in response. At an industry conference this week, Comcast CEO Brian Roberts said the company will bundle Netflix, Apple TV+, and Peacock at a “vastly reduced price” for its internet and TV customers. That package, whose exact pricing was not announced, will arrive later this month.
While I want to believe that these bundles will help cord-cutters save money, I’m skeptical about the long-term impact. History suggests the savings will be fleeting, and that the great re-bundling will only provide cover for more price hikes.
Another excuse to raise prices
Just a couple years ago, streaming providers were talking up ad-supported TV as a way to defray subscription costs. Instead, they’ve used their ad-supported tiers as a cushion to absorb the impact of ever-higher prices.
Disney was the original offender. The ad-supported tier of Disney+ launched in late 2022 for $8 per month, the same as what Disney+ previously cost with no ads. Meanwhile, the ad-free Disney+ tier jumped to $11 per month, and it now stands at $14 per month after another price hike last fall.
The move might have inspired Amazon, which in January turned Prime Video into an ad-supported streaming service. Avoiding commercial breaks now costs an extra $3 per month.
Comcast and NBCUniversal are now following a similar pattern with Peacock, which launched four years ago for $5 per month with ads and $10 per month without. After one price hike last year and another scheduled for July, the price will sit at $8 per month with ads or $14 per month without. At this rate, it won’t be long before Peacock’s ad-supported tier costs the same as the ad-free version’s original price.
Even when streaming services have held the line on ad-supported pricing—as Netflix and Max have done so far—they’ve continued to raise prices on ad-free TV. Ad-supported subscribers bring in more money anyway, so price hikes on ad-free viewing have little consequence.
I now fear a similar game plan for streaming bundles. While the savings may seem significant at first, prices will inevitably rise, and before long they may resemble what you used to pay without bundling. Meanwhile, a la carte pricing could rise at an even faster rate to discourage customers from unbundling again.
This has already been happening with Disney, whose individual streaming services have sharply risen in price as the company pushes its existing bundles. The ad-free version of Hulu now costs $18 per month—it was $12 per month just a few years ago—and throwing in Disney+ only costs $2-per-month more. You can still subscribe to Hulu by itself, but why bother when the savings are so minimal?
Therein lies the endgame for the great re-bundling. The goal is not to help people spend less on TV, but to discourage subscription hopping, which predicably has become more common as streaming services raise prices. By bundling services together, streamers can more effectively boil the frog on further price hikes, just as they did with ad-free streaming.
What you can do about it
While it’s hard to offer specific guidance in the absence of full price details, it’s clear that we’re entering a new age of streaming, in which streaming services will be sliced and diced in different ways—and not always for the better.
Cord-cutters who want to avoid overspending will in turn need greater awareness of all the bundle deals, seasonal discounts, and comeback offers that are available. Comcast’s bundle of Netflix, Apple TV+, and Peacock bundle may not be the best option, for instance, compared to extended Apple TV+ trials, standalone Peacock discounts, and a carrier-subsidized Netflix subscription.
But TV programmers don’t want you to think that way. These companies come from a world of mandatory pay TV bundling, which shielded them from consequences whenever they raised prices or spent less on quality content. It was comfortable for them, but expensive for you, which is why they’re trying to bring it back.
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Author: Jared Newman
Jared Newman has been helping folks make sense of technology for over a decade, writing for PCWorld, TechHive, and elsewhere. He also publishes two newsletters, Advisorator for straightforward tech advice and Cord Cutter Weekly for saving money on TV service.