Streaming services are nearing their peak and bundles could be the lifeline they need.
Slowing subscriber growth and rising costs are putting pressure on music streaming platforms.
In the first half of 2024, streaming revenue grew by just 4%, while vinyl jumped by 17%. Simply put, music services need to come up with new ideas or risk financial losses.
To keep up, the idea of a ‘super bundle’ is becoming more likely, especially with its success on video streaming platforms.
The Potential of Bundling in Music Streaming
Taking a page from the video streaming playbook, music services are exploring new ways to package their offerings.
Spotify, Apple Music, and Amazon Music have already started combining music with audiobooks and podcasts on ‘bundled subscriptions.’
But the real game-changer could be “super bundling” – A.K.A. wrapping up music, video, and gaming subscriptions into one tempting package.
We’ve seen this on video platforms. But, why exactly is bundling gaining traction?
For starters, it’s a powerful tool against churn, which is the dreaded subscriber exodus that keeps streaming execs up at night.
By giving more value, bundling not only gets new users but also gives current subscribers a reason to stay.
This comes at a crucial time when churning is becoming a major problem on streaming services.
According to the most recent Luminate report, churn has become a significant challenge for SVOD platforms, with about 25% of U.S. consumers having canceled three or more streaming services since 2022.
This “churn-and-return” behavior reflects how users now cycle through subscriptions, subscribing temporarily and then canceling, which makes it harder for platforms to maintain a stable user base.
But it’s not just about keeping subscribers; it’s also about expanding horizons.
Imagine having access to live concerts and events alongside your usual playlist. That’s the kind of innovation we’re seeing with services like Verizon’s +play, which includes live music options from VEEPS and Qello Concerts.
It’s an effective response to what consumers want as 60% of music streamers are keen on their cellphone providers offering bundled services.
What Music Platforms Can Learn from SVOD Bundling
Video streaming platforms have already shown us the power of bundling. Take Disney’s triple threat of Disney+, Hulu, and ESPN+ for example.
By offering up to 40% savings when bundled, they’re speaking directly to our wallets. And let’s face it, in today’s economic climate, who doesn’t love a good deal?
The same logic applies to music streaming.
If they partner with video, gaming, or even fitness services, they could offer something that keeps subscribers hooked.
But bundling isn’t just about saving money. It’s a great way to learn about what people like, letting companies improve their offerings and make things more personal.
And for those watching their budgets, options with ads could be even cheaper. That’s great news, especially since free music streaming platforms are predicted to go extinct soon.
Lastly and maybe most importantly, bundling fixes a growing problem for users: the hassle of dealing with lots of subscriptions.
According to reports, 85% of consumers are fed up with navigating numerous apps.
So, by making streaming simpler, bundling could be the key to happier, more loyal subscribers.
Why Bundling Isn’t a Simple Fix
Yet, bundling isn’t a one-size-fits-all solution.
One of the major challenges facing the bundling model is integration.
Many current bundles still keep their services separate, forcing users to hop between apps.
Sure, some companies, like Paramount with its Paramount+ and Showtime bundle, have managed to create a seamless experience. But, others haven’t been able to do this.
Cross-company bundles, in particular, often fall short of providing a truly unified platform.
This fragmented experience can make things less convenient, which is the opposite of what bundling is supposed to do.
For smaller music streaming services, the trend towards bundling is even harder to deal with.
Without the big libraries of content that giants like Spotify or YouTube Music have, these smaller players might struggle to offer good bundles. So, if bundling becomes the norm in the industry, this could push them to the side.
The success of bundling in music streaming will ultimately hinge on how well platforms can overcome these integration hurdles.
One thing is clear, though. The future of music streaming is likely to be more interconnected and diverse than ever before. But, whether that’s music to our ears remains to be seen.