Illustration: Eniola Odetunde/Axios
The streaming business is starting to resemble the legacy TV bundle that it was supposed to replace. News around Walmart underscores the point.
Why it matters: Investors are increasingly worried that the streaming model is not sustainable and is about to create a lot of pain across the industry.
Driving the news: Walmart held talks with media companies — including Disney, Paramount and Comcast — about bundling their streaming services with the retail giant's Walmart+ membership, the New York Times reported Tuesday.
- The bundling news out of Walmart shows how the streaming model is turning to cable-style maneuvers.
- Streaming allowed consumers to break free from onerous cable bills and long-term contracts that forced them to pay for scores of TV channels they didn't watch.
- But it's a different ballgame now.
Of note: Streaming services already have bundle partnerships with phone carriers like T-Mobile, AT&T and Verizon as a way to boost subscribers, while the phone companies subsidize the cost for their own customers as a way to win them over.
Yes, but: Streaming's growing resemblance to cable goes beyond those partnerships.
- First are FAST — or free, ad-supported streaming TV services — like PlutoTV. Warner Bros. Discovery said last week it's planning to launch its own free service. Peacock also has a free subscription.
- Cheaper, ad-supported streaming subscriptions come from Hulu, Paramount+, HBO Max, with Disney+ and Netflix launching their own over the next six months.
- At the top are ad-free streaming services like Amazon Prime Video and Apple TV+, plus more expensive ad-free tiers on other services.
💠Tim's thought bubble: Those look an awful lot like the breakdowns between broadcast, cable and pay-cable channels.
