One of the things that many of us dislike about our cable company is the bundle. We are required to subscribe to a host of channels when we only want a few. The promise of going over the top is that we can now choose the services we want without the ones we don’t.
But we are now witnessing the re-emergence of the entertainment bundle in the over the top world.
The leader in the new bundle movement is Amazon which is putting entertainment options into its Prime service. Estimates for Prime membership go as high as 60mm households. We are one of them and have been for as long as Prime has existed.
The other bundler is YouTube. Their newish Red subscription service offers ad-free youtube, “original shows”, and premium music.
I expect Prime and Red to expand over time to include additional services (games, sports, etc). They are the new entertainment bundlers. I also expect others to enter this business. The most obvious candidates are the mobile carriers who already have a regular billing relationship with us.
The good news is that the new bundlers do not have a monopoly in their ability to offer entertainment to us. They have to compete with each other in an open market. So I expect that the bundles that emerge will be attractively priced and will be differentiated by price and content options.
Bundling has cost advantages like sales and marketing that can be offset across multiple services. And it is easier to subscribe to one service than ten. But over the top promises user choice over our entertainment options. With the new bundlers, we may be getting the best of both worlds.
