“Superbundling”-- the practice of offering a package of services from different providers--has a long history in the cable TV and telco businesses. For many decades, the "triple play" of home broadband, linear video and voice was a staple in the business.
"Superbundling" that linclude streaming services in the older bundles has gotten more traction recently with the contract signed between Charter Communications and Disney relating to carriage of linear and streaming video services.
In many ways, that search for the "right" products in a bundle is the search for a "natural" bundle that makes sense to most consumers.
Traditionally, bundles have included Internet access, linear TV and phone service. In recent days mobility service has been added to the “natural bundle.”
In their search for additional “natural bundle” services, ISPs have looked at app security, electricity services, home security and now video streaming services, with limited success to date. So attention now has turned to integrating video streaming platforms like Netflix, Hulu, or Disney+.
As always before, there are advantages for consumers and providers that eventually become negatives for both.
Consumers have preferred bundles for a simple reason: they save money. Suppliers like bundles because they boost perceived value, average revenue per account and reduce churn, while boosting revenue.
But bundles eventually can become their opposite. Consumer opposition to linear video subscriptions now turns precisely on the “paying for products I do not want.” In the past, for example, some customers took triple-play packages of video, home broadband and voice for the savings, but never even activated the voice services that were part of that bundle.
And that is one danger for bundles: customers might come to feel they are paying for products they do not want. So where the cable TV bundle once was pitched as providing value--many channels for one price--it became a negative as consumers found they were paying too much for too many channels they never watched.
Also, buyers eventually come to distrust and dislike product bundles that obscure the actual cost of each product within the bundle, as well as the vendor lock-in that the bundles represent.
There is a delicate balance between cost, choice and simplicity that always has to be faced, where it comes to bundling. More products for one price--presumably representing equal increases in value--works. Until it doesn’t.
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