Apple and Paramount+, the alliance of the second knives?

2023-12-04 10:09:00

Consolidation continues in the subscription video on demand (SVoD) sector. At the end of last week, the Wall Street Journal revealed that the leaders of Apple and Paramount are negotiating a merger of their commercial offers, a “bundle” or grouped offer in the jargon. Concretely, the two services AppleTV+ and Paramount+ could be marketed together, for a price lower than the two offers alone combined. The objective: to become more attractive in the eyes of consumers.

The alliance of the small against the big

According to le Wall Street Journalthis alliance is purely commercial: it is not a question of merging the two services, just of offering a cheaper subscription giving access to both applications, and initially only in the United States.

The approach makes sense: according to a study by the firm Antenna, bundled offers retain consumers more. Subscribers to a single offer are more likely to unsubscribe quickly after consuming the content they are interested in.

Netflix, Disney+, Canal+, Paramount+, Amazon, Pass Warner… comparison of streaming offers in France

Additionally, bundling is a great way for challengers to stand up to the leaders. The SVoD market is dominated by Netflix (247 million subscribers in the third quarter), Amazon Prime Video (220 million subscribers in the second quarter), and Disney+ (147 million users in the third quarter). Paramount+ and AppleTV+ are far behind. The first claims 63 million subscribers worldwide in the third quarter. For its part, Apple does not even communicate figures for its streaming service. According to analysts, it would be last among general offers, with 25 million subscribers.

In this context, it is difficult to exist alone, especially since the market also includes Max (96 million subscribers), but also Hulu (48.5 million) and Peacock (30 million).

It is not yet known whether this possible bundle would apply to France, where AppleTV+ and Paramount+ are available both individually, and in a bundle distributed by Canal+.

Consolidation and bundled offers, the future of video streaming?

This possible commercial merger is part of the context of a vast movement of consolidation of the SVoD market in the United States over the past year. Last year, Warner Bros. Discovery merged its two streaming services, HBO Max and Discovery+, into a single service called Max, to become more attractive against Netflix.

For its part, the Disney group, which owns Disney+ and two-thirds of the capital of the Hulu platform, is preparing to buy the remaining third and possibly merge the two services in 2024, in order to offer a truly attractive and put an end to the decline of Disney+ in 2023. In recent months, rumors have also appeared concerning the possible acquisition of Peacock by Warner Bros. Discovery.

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Without even talking about consolidation, the development of bundled offers seems inevitable to reduce the churn (the flight of subscribers), retain customer loyalty, and strengthen the attractiveness of the least popular services. And for once, France seems to be a pioneer in this field: Canal+, which has its own streaming service MyCanal, owes part of its central position in France to its distribution offer. The Vivendi giant integrates AppleTV+ and Paramount+ into its offer, and also distributes the services of competitors Netflix and Disney+ in a bundled offer including the five services at 39 euros per month. An effective way for AppleTV+ and Paramount+ to reach a wider audience.