Recently, Spectrum and other cable TV companies have started to bundle cable TV plans with streaming services. First was a massive deal with Disney that would give Spectrum customers free Disney+ and ESPN+. Now Paramount has announced it reached similar deals to bring its streaming services to cable TV budnles. Warner Bros. Discovery also talked about bundling Max with cable TV just this week.
Cable TV executives are hoping that by bundling streaming into cable TV packages, they can slow down cord cutting by giving customers a bundle deal on streaming and cable TV. The problem, though is the very thing that cable executives think will save cable TV may speed up its death.
Here are two reasons cable TV’s bundling of streaming services into cable TV will speed up cord cutting:
#1 These Bundles Will Drive Up the Cost of Cable TV
Recently during Warner Bros. Discovery’s earnings call its CEO talked highly of this Disney Spectrum deal as it would force every cable TV customers to pay for ESPN+ and Disney+.
The question is, who will pay to cover the costs of bundling these services into cable TV? A hypothetical bundle that includes the ad tiers for Max ($9.99), Disney+ ($7.99), Peacock ($5.99) and Paramount+ ($5.99) would cost around $30. Even if a cable provider were to get a wholesale discount, that would still represent a material increase to their programming costs. Even half that amount would mean another $15 a month per subscriber. That could go even higher if you include other services like ESPN+. Sadly for customers, cable TV companies have a history of passing these costs to its customers.
This price jump could drive many cable subscribers into cord cutting to avoid this new price hike.
#2 Cable TV Subscribers May Discover The Joy of Streaming
After saving money the second most popular reason our readers cancel cable TV is that they just didn’t use it enough. By bundling cable and streaming cable TV, companies risk having their customers spend even less time on cable TV with all the new streaming services they offer. If, suddenly, cable TV customers are spending even less time in cable TV and more streaming, they may wonder why they are paying for cable TV when they can get the same streaming services cheaper without cable TV.
Cable TV executives seem to think that by bundling streaming, they will slow cord cutting. In truth, they are just as likely if not more so likely, to help speed up the growth of cord cutting. Cord Cutting is about more than just streaming its about how we watch TV is changing. For networks running streaming services, this is a win-win. They get more money upfront and get free marketing to cable TV subscribers for the upcoming day when cable TV dies.