How successful are streaming bundles? We just got a strong data point via Antenna: The Disney+-hulu-Max bundle is « stickier than Netflix » based on Q3’24 data. Let’s put some $ figures on this, using the Streamonomics framework:
The simplest way to estimate the marginal Lifetime Value of a subscriber is multiplying Average Revenue Per Sub (ARPU) times life span, which is 1 ÷ Churn. (I say marginal because this LTV metric ignores costs; an overly simplified model, only relevant where costs are largely fixed).
I estimate US subscribers to Disney+, hulu and Max have marginal LTVs in the $180-$200 range (based on Disney+’s North America reported ARPU of $7.70, Hulu SVOD at $12.54, Max at $11.99). The combined bundle advertises a 43% savings to the consumer. If Antenna’s reported churn reduction holds over time, and the DisneyhuluMax bundle does match Netflix’s industry-best churn rate (~2% per month in the US), bundle subscribers will have a life span of 50 months.
Their marginal Lifetime Value will rise to $576 for Disney+hulu combined, and $340 for Max —a 55% increase for Disney DTC and nearly current levels double for Max. However, I assume Disney charges Max a fee off the top, making the gain slightly better for Disney.
Overall, on a Unit Economics basis, a very strong start. It will take a while for these gains to show up on the P&Ls of the respective companies, because we don’t know how many subs are taking these bundles (and even for those, the difference between a 20 month life span and a 50 month life span won’t show up immediately). For reference: I estimate Netflix’s marginal Life Time Value in the US at $860.
Again, this analysis is overly-simplistic; it ignores subscriber mix, advertising benefits, and most importantly « resubscribe » rates (a share of those who churn tend to subscribe later, thus the marginal LTVs I used as a starting point are likely understated). The biggest question is how many people are actually taking them: Antenna reports the new bundle accounted for 2.2 million subscriptions through Dec 31st. WBD reports earnings this week, I’m sure they will be asked.
Anything I got wrong, or anything to add? Comments please. (Where you’ll also find a link to the WSJ article that quotes the Antenna data).
Update: please see comments