Cutters Q&A: Bango VP Explains What a Super Bundle Is & How it Will Impact The Future of Streaming





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“Super bundle” is an industry buzzword you’re likely going to hear about a lot more from your cable and telecom providers. 

This best example is from Verizon Wireless, which offers a marketplace of services ranging from Max to Apple One and even Peloton, which you can add on to your core cellular service. These aren’t freebies, like the old days, but a way for you to tack on new subscriptions and manage them in one place. 

This will become an increasingly popular trend, particularly with telecom companies around the world, according to Giles Tongue, the vice president of marketing for Bango. 

Tongue and Bango have a vested interest in this, since the company offers a software platform that is essentially like a virtual vending machine with different partner services. A telco or other company could work with Bango to create their own marketplace using these partners. 

Cord Cutters News had a chance to talk to Tongue at the Parks Associates’ Future of Video conference. The following is an edited version of our conversation. 

Cord Cutters News: What is super bundling? Maybe to start things off, break down how bundles began.

Tongue: The first generation of bundling was where you would get your voice, your data, and your messaging put together into one price. These are all first party bundles bought together. The second generation is really where you’d have a content provider, let’s say Netflix for the sake of argument, which is bundled together in a kind of sales promotion. Instead of money off, they’re saying, “we’ll now give you Netflix free for a year.” 

That was the second generation of bundling and the downside for the telco is that the customer is lost to Netflix. They go off to Netflix and they’re not seen again.

With the third generation, super bundling, the telco is now selling the product, which means the relationship is retained with that customer for these new products. So whether they’re selling Netflix, Microsoft Game Pass, whatever the types of products, it doesn’t really matter because what they’re now doing is getting benefits of a deeper relationship, stronger engagement with the customer, which will then have the effect of reducing churn, driving loyalty and a longevity with that customer. 

So it’s really switching the approach to bundling from we’re going to use it as a sales promotion to enhance the value of our initial product to now, we can actually drive a long-term relationship with our customer if we make it easy for them to buy their products and services from us. And then the next sort of phase of that is going to be looking at how they can create bespoke products, curate experiences, select unique and interesting products, which probably the consumers aren’t aware of, and put them together in way that consumers can then benefit from this whole range of different types of products and services.

Cord Cutters News: I’m curious about this mentality shift from the telcos. Is this just purely about customer loyalty and retention, or is there a revenue aspect here?

Tongue: Our data has shown it is basically all of those things. They’re always chasing ARPU (average revenue per user), which has flattened out completely. It’s almost become a commoditized service in many countries. So how can we drive up ARPU? How can we get more revenue per customer into the system and one way of doing that is to sell them more stuff. So that’s one objective. 

Super bundling has been proven now to reduce churn, so you can retain customers. Of course, if you have a very exciting platform like this, where you are able to bring together multiple subscriptions and services that’s easier to use, it’s an attractive proposition that then leads you to an acquisition potential. 

Now you can take your content hub to new customers and say, “Hey, if you come with us, you’ll also be able to benefit from this and there might be unique deals or whatever in there.” There’s benefits across the board, customer acquisition, cost reduction, loyalties increased, churn is reduced, engagement and NPS (net promoter scores) go up.

Cord Cutters News: Verizon already offers this with more than 40 services through its +Play marketplace. How quickly does this become the norm for telecom, cable or other companies?

Tongue: That’s a great, great question. So we’re in the adoption cycle, and we’re still before the big uplift, right? So this is still early days. We are running around the world talking to as many telcos as we can because we know they are all thinking about this.

Cord Cutters News: Is it just Verizon and Australian carrier Optus?

Tongue: EE in the UK has got something coming up, which is a similar kind of marketplace idea. And there are many around the world who have bundling of some nature, but they’re now thinking of this switch from using bundling as this sort of acquisition-only tool to now this kind of retention, loyalty and getting more out of it through this super bundling. The switch is I’m not giving this away, I’m now selling it and I’m using it as its tool for retention and loyalty.

Cord Cutters News: That’s an interesting switch and something consumers will need to get used to. We’ve seen in the last few years that carriers are getting out of that mode, and it’s been kind of painful, forcing people off for some of those free services that they once had. Looking at the consumer, will super bundling ultimately end up saving them money or not?

Tongue: That’s a great question. So what our data shows us is that people are overwhelmed currently with the number of subscriptions they have, they’re losing control, and that’s creating a really bad feeling which could be described as being overwhelmed or frustrated. Our data also shows that if you make that easier for the customer, they’ve got better control over their household income. They find it easier to manage what they’re spending and how they’re using their money. And they will then spend more as a result. It’s a really interesting paradox.

Cord Cutters News: Verizon has about 40 partners now with +Play. Do you think that will be the norm in terms of the number of different partners that will be provided to consumers?

Tongue: There’s clearly some thinking behind it, which says having a good range is a good idea. I’m not able to comment on how Verizon thinks about these things. But what I can observe is, the better you understand your consumer, the better you can create packages, whether it’s a la carte or a set menu that’s going to appeal to them. And when you do that, you have more chances of achieving the overall objectives, engagement, loyalty and so forth. 

So it could mean that for a particular user group, for example, you may wish to have five or 10 services that you think are really going to appeal to them. But of course, you might have five, 10, 15 different segments that you’re interested in. And for each of them, you may wish to have the same or different services. The depth and breadth of this could be quite broad. 

When it comes to (subscription streaming services), there are a few standouts like Netflix, Disney, Amazon Prime, and these are kind of uniform around the world as the leaders. What happens next though, can vary quite a lot from country to country and I think that’s where we’ll see this breadth and depth, which will include localization and niche areas. 

For the bigger participants and super bundling, we’re seeing SVOD (subscription video on demand), sports on demand, retail things like Amazon Prime or Walmart Plus. And then into lifestyle like health and fitness and productivity. There’s quite a breadth of different types of content or verticals, if you think of it that way. 

Not every vertical needs great depth. How many educational apps do you need? Or how many language apps do you need? How many meditation apps do you need? But you might at least have one or two in each of those categories, whereas your SVOD and sports world may be a little deeper. So you can pretty quickly see how you can get to quite a numerous portfolio of different content.

Cord Cutters News: Carriers typically don’t like to offer overlapping services, and have historically locked in exclusive deals when it comes to partnerships. Is there going to be a point where consumers will have to do the homework in terms of what bundles are available to them based on the wireless service they choose?

Tongue: There’s definitely a first mover advantage available. In a certain market, whoever goes first with super bundling is probably going to have access to the best deals and the best bundle opportunities, which then diminishes the second, third and fourth participants. 

But then it comes down to how a telco typically differentiates versus its competitors. And within that will be a certain segmentation and work that they’ve already done to understand their consumer. So we understand our target audience. We’ve identified these four or five different groups. We’ve given them a name, we know what they do, we know their life stage and their lifestyle. Now let’s create a bundle that’s suited to those or create an a la carte menu of products which are going to suit those, that’s consistent with what they’re doing already. 

So telcos will differentiate via these different groups that they’re going after from a segmentation point of view. And that will be the same in super bundling.

Cord Cutters News: Amazon has been trying to push this idea in streaming with its Prime Channels, which is a different version of a super bundle. What role do these other companies play in the super bundle?

Tongue: What you’re alluding to is can a content provider also become a reseller? Absolutely. And Amazon would be a good example of a company who is on the one hand trying to distribute their products far and wide, and using the Bango digital vending machine to achieve that around the world, but in another room in another office, they’re also selling products themselves.

Cord Cutters News: Lastly, is super bundling an industry term or just something you’re trying to make a thing?
Tongue: It’s a term that exists, but we’re certainly putting a lot of oxygen into it because it helps convey what we’re talking about here.

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