September 19, 2023 6:00am PT

What New Disney-Spectrum Packages Mean for Streaming Bundles

The cable bundle’s last stand has become a new day for streaming bundles.

By the terms of its new carriage deal with Charter Communications, Disney now offers two of its SVOD services — ad-supported Disney+ and ESPN+ — in a long-term bundle with a pay TV subscription, the sole major streaming company currently doing so. But it likely won’t be the only one for long, as the Mouse House’s standoff and ultimate resolution with Charter potentially represents a seismic shift in studio-cable provider business relationships.

Up to now, pay TV distributors have not included the major streaming services in cable packages except as short-term promotional deals, with one principal exception: NBCUniversal’s Peacock Premium, which Comcast and Cox have bundled with cable and broadband service.

However, the massive losses posted by that SVOD necessitated termination of these deals, and both telcos cut off their customers’ free access to Peacock earlier this year.

This is why I believe Disney wouldn’t have struck its bundle deal with Charter if not backed into a corner. While the studio will benefit from Charter’s consumer relationships and distribution channels, it will also see less revenue per user via the bundle than it would through a direct wholesale subscriber.

Of course, these are the main trade-offs of streaming bundles in general. And Disney will also benefit from the low churn of cable subscribers, meaning many streaming users it acquires through Charter will remain in the fold for years (provided they don’t cut the cord).

But regardless of the costs and benefits, what’s most significant here is that Disney made the deal at all. This pact has the potential to reshape the streaming bundle landscape, setting a precedent other providers and streamers are highly likely to follow, or at least draw from, in future negotiations.

This also suggests a true “rebundling” may not be as remote a possibility as many (including me, to be transparent) previously thought. With Charter having broken the seal, cable providers are now poised to become new players in the streaming aggregation field, stepping into territory previously reserved for tech companies such as Google, Amazon and Roku.

If Charter and other telcos strike similar carriage deals with multiple streamers, however, they’ll be able to offer consumers a package of SVODs for one price — rather than à la carte, as platforms like Prime Video Channels do. In other words, they’ll do what cable companies have been doing for years with linear networks, only with SVOD platforms.

This is a potentially industry-shaking development: It once seemed highly unlikely that studios would embrace a second coming of the cable model by bundling all their streaming services together in one package. Now it seems entirely possible, if not immediately probable, that the right cable company could offer such a package.

The question then becomes whether this enticing prospect, if and when it becomes reality, can lure cord-cutters back to the cable bundle. With SVOD prices on the rise, it’s not hard to see many consumers embracing such an offering, though it’s equally likely many will opt to keep the increased flexibility of à la carte streaming subscriptions.

Still, as of June 2023, nearly 40% of premium SVOD subscriptions in the U.S. were purchased through an indirect distributor, such as Prime Video Channels or Apple TV, according to analytics firm Antenna.

This was up from 22% in 2020, suggesting consumers are increasingly eager to consolidate their streaming subscriptions through a unified platform. (Consumer survey data has also indicated as much; see our special report on streaming bundles for more.)

Of course, this is all just speculation until more carriage deals are struck in the Disney-Charter vein. But with demand for bundles rising and the precedent set, it seems highly likely that similar pacts will follow. After all, if you doubt other streamers would follow Disney’s lead, remember that the “plus” naming trend began with everyone copying the Mouse’s example.

Now dig into the data-filled VIP+ subscriber report ...