Forget Streaming Bundles—the Future is About ‘Ecosystem Bundling’

I’ve always been fascinated by metamorphosis—a tadpole becomes a frog, or a caterpillar becomes a butterfly. Why do living creatures need to change form as they mature? Do environments demand constant development? What are the benefits? The streaming industry is undergoing a similar process that has me asking the same questions. As the transition from our linear and analog world accelerates, competition in the direct-to-consumer (D2C) industry grows at an equal rate. To build and maintain competitive advantages in a world of finite consumer spend, major players are realizing that television series and films will not be enough to guarantee interest. Instead, the goal is to create all-encompassing digital ecosystems that bundle entertainment with broader consumer services to keep customers within their digital ecosystems for as long as possible. 

The move has unfettered programmers and distributors from traditional ways of doing business, allowing them to package and deliver entertainment in innovative ways. Streamers backed by Big Tech (Amazon (AMZN) Prime, Apple (AAPL) One and YouTube), in particular, have bundled content and utilities such as retail, shipping and games into one ecosystem. 

“The shift toward bundling content with broader consumer services reflects a larger trend in digital media—content alone is no longer enough,” John Mass, president of Content Partners, a firm investing in entertainment assets, told Observer.

Yango Play, a small service launched in the Middle East and North Africa (MENA) region last year, may serve as a microcosm for the future of streaming bundles. It offers a mix of Hollywood and local market content, music streams, curated playlists and mobile games. What sets it apart is the gamified app function Yango City, which rewards users for activity across different platform verticals, allows them to see the activity of friends and family and compete for various in-app rewards and perks.

This approach performs the important function of moving streaming from a passive experience into an active one, creating a social community in the process. By giving subscribers a sense of direct control and ownership, Yango Play points toward a new model of media consumption that encourages more frequent platform engagement and socialization. 

The platform’s strategy, along with the templates established by Big Tech, suggests that successful media consolidation is less about smashing together expensive premium content libraries and more about strategically coupling complementary and overlapping services. This hits on a key insight: consumers aren’t necessarily seeking more content but better, more engaging experiences.

Subscription fatigue calls for a new kind of product

Subscription fatigue is taking its toll on consumers in a volatile economy. Price sensitivity has never been higher after nearly every major subscription-video-on-demand (SVOD) service jacked up prices over the last 18 months. John Harrison, who leads a team at EY identifying disruptive opportunities in media and entertainment, emphasizes the importance of subscriber retention in a time of unchecked churn. “Reducing subscriber churn is crucial for the profitability of streaming services. Retaining subscribers poses a challenge as consumers can easily switch services on and off at their convenience,” he told Observer. 

To combat this, Harrison notes that providers are exploring various bundling strategies. The most common is combining D2C services at discounted rates, such as Comcast’s StreamSaver bundle (Netflix (NFLX), Apple TV+, Peacock) and the Disney-Warner Bros. Discovery (WBD) bundle (Disney+, Hulu, Max). The other approach is creating broader lifestyle bundles incorporating e-commerce, music, travel and more. For instance, Verizon is bundling Netflix and Max with its phone service, and Spotify is reportedly exploring a new package that would include concert tickets. 

While Amazon, Apple and Google are consistently mentioned as frontrunners in the bundling ecosystem race, industry experts emphasize that success in this space is more nuanced than it might appear. “Viewers’ habits have changed. Content has evolved. Traditional media companies that rely solely on content subscriptions face a steeper challenge,” Content Partners’ Mass said. “Consumers no longer default to network television or standalone streaming services. They have an endless array of digital content at their fingertips.”

The streaming landscape is not a zero-sum game. Netflix undoubtedly dominated D2C’s infancy, but the next phase is about securing secondary subscriptions via content value propositions and pricing strategies. “Streaming platforms that own their content libraries, such as Netflix and Disney+, have a competitive advantage,” Eli Goodman, CEO and co-founder of Datos, told Observer. “Unlike traditional cable companies that primarily act as distributors, these platforms function as both developers and distributors, allowing them to control distribution, pricing and usage rights.”

Each major player brings distinct advantages to the table. Amazon and Apple leverage their substantial market power outside entertainment, while YouTube benefits from Google’s technological infrastructure. Disney+ draws strength from its beloved brand power across several divisions, especially theme parks and merchandise.

However, not all assessments align. Iryna Chuhai, chief marketing officer at the content production hub WePlay Studios, offers a contrarian view on Netflix’s position in this new bundled ecosystem hierarchy. “The weakest is Netflix. As for now, the company does not have much to offer except content and some games based on existing content IPs,” she told Observer. In the long term, this could be a thorn to the market leader.

A.I. will define the best streaming ecosystems

When we cast an eye to the future, A.I. is unsurprisingly a major talking point in defining the next phase of streaming bundling and ecosystem creation. Mithilesh Ramaswamy, a cybersecurity A.I. The future of streaming lies in A.I.-powered hyper-personalization, according to experts. This means predictive recommendations, A.I.-generated media like synthetic influencers and virtual concerts, and interactive content through A.I.-powered storytelling will revolutionize user engagement in the best streaming ecosystems.

This shift gives tech giants like Google, Amazon, and Apple a significant edge over traditional media companies due to their advanced A.I. capabilities. However, this power comes with ethical concerns. There is a fear of a dystopian future where corporations dominate every aspect of our lives, drawing us into their ecosystems. While users may benefit from this level of personalization, the growing power of these ecosystems raises antitrust and data privacy issues.

Just as evolution teaches us that our initial form may not be the most effective for survival, the streaming industry must adapt to stay competitive. Simply offering content may no longer be sufficient for success. Companies that want to thrive long-term will need to transform their streaming services into comprehensive bundles and ecosystems.

To succeed in this new landscape, platforms must strike a balance between consumer value, quality content, and technological innovation. Collaboration between companies may also play a crucial role. The streaming service that can best merge sought-after programming with personalized experiences and seamless services will cultivate a strong sense of ownership and community among users.

In essence, the future of streaming is not just about providing bundles of content but about creating holistic ecosystems that cater to the individual needs and preferences of users. This shift requires a strategic approach that prioritizes user engagement, innovation, and ethical considerations to ensure a sustainable and successful streaming platform.