Max, Disney+, Hulu ad-free bundle coming amid high streaming cancellation rates

[Karlston]

Price TBD as Max is reportedly planning a price hike.

Streaming services are assembling... into a bundled package.

Marvel Entertainment/YouTube

 

Sometime this summer, US customers will be able to buy a subscription to Max, Disney+, and Hulu together for a discounted price. The Wednesday announcement from respective owners Warner Bros. Discovery (WBD) and Disney comes as the streaming industry combats a competitive subscription marketplace burdened by constant cancellations.

 

WBD and Disney didn't provide a specific release date for the package but said that people will be able to buy it from "any of the three streaming platform’s websites offered as both an ad-supported and ad-free plan.”

 

The companies didn't confirm a price, but the bundle should be cheaper than all three services combined, which would start at $47.97 per month for no ads and $25.97/month with ads.

 

However, Bloomberg, citing "people with knowledge of the matter," said on Monday that WBD "has decided to raise subscription prices as it seeks to reach $1 billion in earnings from the Max and Discovery+ streaming services" in 2025. WBD has declined to comment on the purportedly upcoming price hike, which will affect the bundle's final pricing.

 

WBD and Disney said they would provide more information about the bundle "in the coming months."

People keep canceling their streaming subscriptions

There was a time when video streaming seemed like a safe haven from some of cable TV's largest irritants, like growing prices, confusing packages, changing contracts, and commercials. Now, streaming services frequently aggravate subscribers in many of the same ways.

 

Subscribers are quick to cancel their subscriptions to these platforms, whether to avoid these frustrations or because they've finished watching their favorite content on the service. According to subscription analyst company Antenna, about 25 percent (or 29 million) of US video streaming subscribers have canceled three or more of their subscription video-on-demand services in the last two years. Such subscribers reportedly represented about 40 percent of new subscriptions and cancellations in 2023, the company told The New York Times last month.

 

This high churn rate is a streaming business "killer," WBD CEO David Zaslav said during an earnings call this morning, according to The Hollywood Reporter. The executive described the bundling of streaming services as "a big helper" to fighting cancellations, which WBD has been "hyper-focused on."

Bundles of bundles

Bundling doesn't address many of the customer pain points stated above, however. And perceived value can vary, especially if a customer is being pressured into a bundle just to view a few titles they couldn't access otherwise due to stringent licensing.

 

Still, streaming companies will continue looking for ways to bundle their services in an effort to combat cancellations, which are less likely if one service is tied to others.

 

Streaming-related bundling is already common, as shown in a chart in this Variety report. But the upcoming Max/Disney+/Hulu bundle will be unique in that it combines competing video streaming platform plans as opposed to combining a streaming and cable service, for example. WBD already opened up the door to bundling with the competition, as Verizon currently sells a bundle incorporating Max and Netflix. The company is also working with Disney and Fox on a controversial joint sports streaming app.

 

Both WBD and Disney are trying to build consistently profitable businesses. WBD's streaming business, which includes Discovery+ and its linear HBO channel, became profitable last year and claimed $86 million in profits in Q1 2024. It also reported today that the business' subscriber count increased from 97.7 million at 2023's end to 99.6 million. Disney's streaming business, which includes Disney+, Hulu, and ESPN+, lost $18 million in Q1 2024. Disney+ subscribers increased by 6 million to 117.6 million, while Hulu's subscriber base grew to 50.2 million.

 

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