USA TODAY International Edition
The bundles are back – this time for customers of streaming TV
Several companies have announced price hikes
Meet the new bundle, same as the old bundle?
Consumers have embraced broadband-delivered TV from Netflix, Amazon and an abundance of streaming services, often in search of lower monthly bills – and as a path to avoid paying for channels they did not watch in the programming bundles sold by cable and satellite TV providers.
But as cord-cutting becomes more popular, a counterintuitive trend is emerging: higher streaming-TV prices and bundling, this time among internet streaming services.
Within the past month, several of the major internet TV services – Sling TV, DirecTV Now, and PlayStation Vue – have announced price increases. And providers have started to sell ever larger bundles, some with more than 100 internet-streamed channels.
What began as a “Great Unbundling” of media is starting to become the “Great Re-Bundling,” says Will Kreth, the executive director of the Entertainment Identifier Registry, a nonprofit group providing a ID system for movie and TV content. “The temptation to bundle” – to increase revenues from each subscriber from a pricier monthly subscription – “is just too great,” he said.
The live-TV subscriber base is large and growing, with Netflix far in the lead, followed by Sling TV, DirecTV and Hulu. Just as it’s gaining momentum, prices are inching up.
Sling TV, which in 2015 became the first streaming TV service to deliver a package of live-streamed channels including CNN, ESPN and TNT, recently increased the price of its entry-level Sling Orange package by $5 to $25 monthly.
Also hiking prices: AT&T’s DirecTV Now streaming service, which has begun charging an additional $5 each month for its various programming packages. The entry-level bundle, with more than 60 channels including local ABC, CBS, Fox and NBC channels in many markets and CNN, ESPN and USA, will now cost $40 monthly.
Sony’s PlayStation Vue is raising its monthly prices by $5, starting July 24, making the cost of its lowest-price plan $44.99 for about 50 channels.
The main reason for the price increase? The cost of live programming, including sports and news, the provid- ers say.
“We must increase the price of our multichannel plans to keep pace with rising business costs and enable us to continue offering a better way to watch the best in live sports, entertainment and news,” said Dwayne Benefield, head of PlayStation Vue on the PlayStation Blog.
Earlier this year, other major streaming players unveiled higher prices, too. FuboTV in February upped its monthly price by $10 for newcomers to its 90plus channel plan.
YouTube TV in March raised by $5 to $40 the monthly cost to new subscribers of its service, which has 50-plus channels including local ABC, CBS, Fox and NBC in much of the U.S.
These prices still fall below the average monthly bill for traditional pay-TV subscribers, which Leichtman Research Group estimates as $106. But streaming services are tempting subscribers to add more programming.
Should you tack on much more – and add in the cost of Netflix and perhaps Amazon Prime Video – your collective bill can quickly approach that of your old pay-TV bill.
This move to packaging programming is reportedly attracting a prominent name: Apple. The maker of iPhones and iPads is apparently looking into creating its own bundle, according to reports recently in The Information and The Wall Street Journal. Apple did not respond to a request for comment.
There have been signs that Apple is readying a content expansion. The tech giant is expected to spend $1 billion this year on original content and recently signed Oprah Winfrey to a multiyear content partnership. Apple last year added a Reese Witherspoon-Jennifer Aniston TV series to its plans.
Bundling video with other content would make sense for Apple, says Mike Vorhaus, president of Magid Advisors. “It is far from too late to bring more content packages to the consumer party,” he said.
“We must increase the price of our multichannel plans to keep pace with rising business costs and enable us to continue offering a better way to watch the best in live sports, entertainment and news.” Dwayne Benefield Head of PlayStation Vue