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Linear TV bundle reforms on streaming

Aug 10, 2022
Illustration showing logos of streaming services like Netflix and Hulu served up on a platter

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.

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