Image: House of the Dragon, HBO
The much anticipated cross company mega-bundle of Disney+, Hulu, and Max became available to subscribers on July 25th. The fact that Warner Bros. Discovery and Disney, two legacy entertainment rivals, are joining forces in the streaming arena is notable and points to the fact that these companies are willing to put aside differences to better compete with Netflix, which remains a dominant leader.
An analysis of demand for on-platform shows and movies across platforms in the US with Parrot Analytics’ Pricing Framework reveals that the $30/mo. price tag for the mega-bundle is slightly less than $1 more expensive than we would expect relative to what other platforms are offering in terms of demand for content per subscription dollar.
The fact that this three-platform combo is not aggressively priced to sell suggests that this move may be done more to reduce churn than to juice subscriber acquisition numbers. Subscribers signed up for discounted bundles are less likely to churn. If the main objective of this move was to drive sign-ups, it would have made more sense to set the price around $27, similar to how Disney currently prices its Disney+/Hulu bundle and the two standalone platforms.
The Disney+/Hulu bundle is priced at a bargain relative to the two platforms individually, which both look slightly expensive for the amount of on-platform demand relative to competitors. This shows that Disney is still structuring the pricing of its two platforms to strongly incentivize consumers to sign up for its integrated bundle of these two services.
From just a pricing perspective (without even considering what each platform is offering in terms of content) it is apparent that the three-part bundle is not being as aggressively discounted as it could be. The mega-bundle costs 37% less than subscribing to each of the services individually. Compare this to the 38% discount for the Disney+/Hulu bundle relative to those two standalone platforms. However, just adding all three platforms’ individual prices is not exactly reflective of the price subscribers would have paid before the launch of the mega-bundle. Subscribers could get all three for $36.98/mo. previously (the Disney+/Hulu bundle for 19.99 and Max for 16.99) so the new price is effectively a 19% discount - generous, but not the steep discount we have seen with other bundle deals. Although, the most price sensitive subscribers are likely considering the ad-tier, which costs $16.99/mo.
Of all the bargains to be had for consumers looking for ad-free streaming, Netflix Standard is the most steeply discounted relative to its catalog of in-demand shows and movies. It is the single platform with the highest demand for the shows and movies it has available to stream and is priced more competitively than even bundled options like Disney+/Hulu. The new Disney+/Hulu/Max bundle might be the largest in terms of catalog size, but it still trails the market leader in terms of value delivered per subscription dollar.
