Bundling, Unbundling, and What’s Next
My predictions for the future of video entertainment
A grab bag of content from Disney+, Apple TV+, Netflix, and Hulu
Video entertainment has changed so much since I was a kid. My parents didn’t believe in paying for cable TV, so rabbit ears were our best friends growing up. I learned how to gently maneuver the antenna and search for just the right angle to catch a strong over-the-air signal without static or snowflakes. With limited channels to choose from, I became equally well equipped in one-liners from The Simpsons as I did from Seinfeld. I programmed the VCR in the family room to stealthily record Beverly Hills 90210 and snuck downstairs while my parents were asleep to watch the latest episode.
It was a game changer when I finally got cable TV in my 20’s. Suddenly, I had so many channels to choose from! Cable companies offered the equivalent of an all-you-can-eat buffet. The idea that I could watch nearly anything I could think of was tempting - even if a lot of it was mediocre and even if there were limits to how much I could personally consume. I followed the food adventures of Diners, Drive-ins, and Dives. I dreamt about how I’d decorate my future home while HGTV played pleasantly in the background. And having a DVR made it so easy to record whatever I wanted, without worrying about there being enough space on the tape. I felt like I’d made it.
As I grew busier with work and life, I realized that I wasn’t getting as much out of cable. I wondered if watching a couple shows a week was really worth paying almost a hundred dollars a month for. Netflix was a fraction of the price and you could watch a lot of the same shows if you just waited a couple months for it to come out on DVD. Considering how much of a milestone it was to finally get cable, it was a big deal when I made the decision to cut the cord.
Five years later, I still have Netflix. But I also have Apple TV+ and YouTube TV, and I’ve flirted with Disney+ too. Now that things are unbundled, one subscription isn’t enough. Watching Netflix’s rise, networks have ended syndication partnerships with Netflix and each player builds up its own arsenal of proprietary content. I need Netflix to watch “Never Have I Ever”, I need Apple TV+ to watch “Ted Lasso”, and I need YouTube TV to watch the Olympics. What used to be bundled is now unbundled. I’ve traded paying one price to Comcast for all of my content to now paying tolls to Netflix, Apple TV+ and YouTube TV to access three different walled gardens of content. Cutting the cord started with great promise, but is the consumer really better off?
As more people add multiple subscriptions like me, the user pain point of managing those multiple subscriptions will grow. You can theoretically turn these services on and off without being locked into an annual contract, but do you remember when you need to cancel each subscription so that you don’t get charged for an extra billing cycle? You may be paying less for each subscription, but do you notice when they add up to more than you were paying for that one cable subscription in the past? You have lots of content to choose from, but does the lag in loading content when you switch from one silo to another kind of make you just want to give up?
I predict the next big change in video entertainment will be the return to a bundled model. User friction will accumulate, the penetration rate for each individual service will plateau, and then, someone will come along who streamlines our experience by aggregating it all. Just like bell bottom jeans cycle into popularity every couple decades, video entertainment will soon have us feeling deja vu.
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