The evolution of bundling: Key takeaways from our latest Bytesize episode – Summer of bundles

In our recent episode, Summer of bundles on September 4, we explored the dynamic landscape of subscription bundling, highlighting its evolution from simple add-ons to complex Super Bundling. I was joined by VP Marketing Giles Tongue, where the discussion provided valuable insights into the current state of the subscription economy and the various perspectives of consumers, content providers, and telcos. Below are some of the key takeaways from the session, organized into distinct sections for easier navigation.

The subscription economy continues to boom

The conversation opened with some eye-catching numbers from Juniper Research plus some of our own first-party research, Subscriptions Assemble. Today, the subscription economy is worth about $722 billion, and it’s expected to hit $1.2 trillion by 2030. Growth isn’t just about more subscriptions; it’s also about how people are getting them. Bundles and indirect channels are becoming the norm. In our US survey of 5,000 subscribers, people said they now have an average of 5.4 subscriptions, and about a third of those come through indirect providers such as telcos, banks, retailers and more.

Understanding the subscriber perspective

One of the most intriguing aspects of the podcast was the exploration of why subscribers are turning to third-party channels for their subscriptions. Survey results indicated that many consumers prefer these options for reasons such as convenience, better pricing, and promotional offers.

This shift in consumer behavior highlights the importance of understanding the motivations behind subscription choices, which can inform how companies structure their offerings. Giles shared some statistics from our latest Subscriptions Assemble report looking into why subscriber buy indirectly.

The content provider perspective

From the content provider’s viewpoint, we discussed the challenges they face in customer acquisition. Rising advertising costs and increased competition are pushing subscription leaders to explore indirect channels for growth.

This statistic underscores the necessity for content providers to adapt their strategies to remain competitive in a crowded market. In addition, this showcases the importance of enabling your channel (mobile, broadband, retail, bank, CTV etc) to be able to distribute a variety of subscription content to your customers.

The telco perspective on bundling

We delved into the motivations behind telcos using bundling as a strategy. The primary objectives include creating new revenue streams, reducing churn, and increasing customer loyalty.

This perspective is crucial for understanding how telcos can leverage bundling to enhance their service offerings and improve customer retention. Bundling hits many of these important objectives.

The evolution of bundling types

Giles outlined the evolution of bundling, starting from basic hard bundles to more complex multi-party and Super Bundles.

• Hard Bundles: These involve including a third-party service as part of a first-party product offer, often with a free trial.
• Soft Bundles: These allow customers to add services either at point of purchase or at a later date, providing flexibility.
• Multi-party Bundles: These combine multiple services from different providers and even different companies into a single offer and price point.
• Super Bundles: The most complex type, where multiple subscription services are paid for and managed in one place.

Real-world examples of bundling

Throughout the podcast, several real-world examples of bundling were discussed, showcasing how different companies are implementing these strategies.

Globe in the Philippines offers Disney+ as part of their GFiber plan, demonstrating a typical hard bundle example. Another way to offer a hard bundle could be to drive a trade-up behavior, where the higher paid-for tiers include a subscription service “on us”. In this example from Spark New Zealand, Spotify Premium is included as part of their Endless Unlimited Plan.

EE in the UK provides a choice of 7 different subscriptions including Apple Music, Netflix, Xbox Game Pass, Microsoft 365 etc., which you can bolt onto your mobile or broadband plan at any point during your billing cycle.

Rogers in Canada has created a multi-party bundle that includes Netflix, Disney and Apple TV+ all at one price point which has a saving of 30%!

These examples illustrate the diverse approaches companies are taking to enhance their offerings and attract customers, each getting more complex to deliver with multiple moving parts.

The future of bundling: Emerging trends

The podcast concluded with a discussion on emerging trends in bundling across various sectors, including banking and retail. For instance, Barclays offers Apple TV+ as part of their premium plans, while Walmart+ provides a choice between Peacock and Paramount+.

These innovative approaches highlight the potential for bundling to evolve beyond traditional sectors, creating new opportunities for businesses.

Conclusion: The importance of bundling

The podcast provided a comprehensive overview of the current state of bundling in the subscription economy. As companies continue to innovate and adapt their strategies, understanding the various perspectives – from subscribers to content providers and telcos – will be crucial for success.

By leveraging the insights shared in this episode, businesses can better position themselves in the competitive landscape of subscription services.