Report: Apple And Paramount Have Discussed Bundling Their Streaming Services

According to a report in The Wall Street Journal, Apple and Paramount have discussed bundling their streaming services at a discount.

The story doesn't have a lot of details, other than that discussions are still in early stages, with the final bundle structure yet to be determined.

Antenna is reporting that as of October, both Apple TV+ and Paramount+ experienced a customer-defection rate of over 7%, higher than the industry average of 5.7%.  So it's likely those numbers are part of the reason behind the talks. And given that Apple TV+ has recently raised prices, there might also be some price resistance at work in the plan.

Still, while bundling the two services into some sort of a "soft" bundle might make sense at first glance, I'll be interested to see how the two companies navigate the complex details. A discounted price means a reduced ARPU (average revenue per user) for both services. Neither Apple TV+ or Paramount+ report their ARPU, although during its Q3 earnings call Paramount CFO Naveen Chopra Chopra the company expects Paramount+ ARPU to spike by 20% in 2024. Although it's not clear how that will happen.

Disney is able to easily bundle Disney+ and Hulu because they share the same billing infrastructure and neither service has to give up control of user data.

That wouldn't be the case with Apple TV+ and Paramount+ and given Apple's desire to keep users inside the Apple ecosystem, it's likely Apple would be the one handling billing and controlling user data.

The Paramount+ situation is already complicated and it's not clear to me what version of Paramount+ might be bundled. There's the basic ad-supported as well as the Paramount+ with Showtime. Generally, these bundling plans include the lowest cost programming tier. But that's problematic in this case, because Paramount is pushing hard to upgrade people to the "with Showtime" plan, which also provides an increased ARPU. So will there be a way in this bundle to upsell subscribers to the "with Showtime" option?

While Apple TV+ hasn't pursued bundles outside of the Apple ecosphere until now, Paramount has been quite aggressive with various bundles and add-on deals.

In the US, a free Paramount+ subscription is bundled into annual subscriptions of Walmart+. And while the prices aren't generally discounted, subscribers of several cellphone services (including T-Mobile) can add Paramount Essential or Paramount With Showtime subscriptions to their cellphone bill.

Globally, Paramount has a number of different bundling deals available, depending on the territory. Some of them are deals with bundle Paramount+ into a local telecom package for a reduced price. And in some cases, Paramount+ content is integrated into a bigger overall cable package for free or a reduced cost.

There is no guarantee this Apple TV+ and Paramount+ bundling deal will happen. But if it does, it's going to be interesting to see what the terms of the final deal look like.