Disney+ & Warner Bros. Bundle Challenges Netflix Dominance

Media Giants Team Up: Disney+, Hulu, and Max Bundle

Meanwhile, in the streaming wars, Disney and Warner Bros Discovery are teaming up in an aggressive move that could shake up an already jumbled category. The combination of Disney+, Hulu, and Warner Bros Discovery’s Max streaming service will be bundled and priced separately from the other services, according to people familiar with the deal. A US launch date in the summer of 2024 for the breakout package hasn’t been announced by the companies yet, nor has the price.

Why Bundles?

This is part of a trend of two forces. One is that consumers want more value for money, while the other is media companies are running scared of Netflix. The power of bundles is that they create a one-stop shop from popular TV to niche content, much like cable.

‘Consumers are seeking to alleviate the pain of too many subscriptions’ As these media startups grow, they will ‘explore their alternative options’ to stop the rot, says Pescatore, the media analyst. Media firms, for their part, are eager to boost subscription numbers – and revenue – in an environment where price hikes, even small ones, have been met with howls of resentment.

However, it’s also not entirely easy to work together. ‘They’re not going to make it seamless doing this with the other media companies,’ says Pescatore.

Netflix Still Holds the Crown

However, no matter what 2023 Hold bundles bring, Netflix still reigns supreme as the streaming king. There are more than three times as many subscribers to Netflix than to Disney+, Hulu, and Max combined. As of February 2023, Netflix had more than 269 million paid memberships globally. Disney+ boasted 117.6 million subscribers excluding Hotstar and ESPN members, according to research by the research company Digital TV Europe. Hulu has 45.8 million subscribers (excluding members of Hulu’s live TV service) but is just a small part of Warner Bros Discovery’s empire, which reported 99.6 million subscribers globally in 2022.

Profitability Concerns

Another concern for both Disney and Warner Bros Discovery is how to make their streaming businesses profitable. While Disney reported a surprise profit in its streaming business in its most recent quarter, that was all offset by an overall loss – and Warner Bros Discovery reported losses in its direct-to-consumer segment.

Netflix Sets the Bar

Even Disney CEO Bob Iger has been forced to acknowledge that Netflix dominates, declaring ‘We’re working to build the kind of streaming technology that Netflix has been refining for over a decade’.

However, analysts believe that bundles might not attract net subscribers away from Netflix, which has a much larger subscriber base with fewer overlapping members among the other services.

Impact on “Middlemen” and Long-Term Growth

Pundits expect the package will harm money-making channels such as Roku and Apple TV, which already take a cut from each streaming service.

Some worry this focus on short-term gains could hinder Warner Bros. Discovery’s long-term growth.

True, the bundle could end up promoting cooperation and bringing down costs – in which case, hitting one target would likely mean knocking the other two into place as well. Yet it’s far from clear whether it can put more people under the Disney banner, or even really pull Warner Bros Discovery into competition with Netflix.