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Study: Bundling and Pricing Impacting SVOD Competitive Landscape

New data from Ampere Analysis finds that as SVOD services in the U.S. mature, pricing and bundling are key to subscriber retention.

Newer platforms (including Disney+) tend to have higher levels of both sign-up and churn (subs not renewing) as they rely more heavily on individual title launches, while established platforms’ sign-up and churn rates are much more affected by pricing changes.

Ampere found that bundling is key to help mitigate price sensitivity, with Hulu and Disney+ having both benefitted in terms of sign-up and churn from the strength of the Disney Bundle, which also includes ESPN+.

During the Dec. 19 “Monday Night Football” broadcast on ESPN between the Green Bay Packers and the Los Angeles Rams, Disney+ ran an ad touting its ad-supported $9.99 bundle with Hulu. The combo has been in effect since Dec. 8, when Disney+ launched an ad-supported option and ended offering the triple combo plan (with Hulu and ESPN+) with no ads on Disney+.

Combining Disney+, Hulu and ESPN+ has been a successful subscriber growth tool for Disney+, in addition to bundling with Hotstar in India. The latter saw a 42% uptick in subscribers in the most-recent fiscal quarter — double the growth of Disney+ subscribers in North America.

With the average U.S. home subscribing to 4.5 SVOD services, the platform stacking ceiling has almost been reached — thus jumpstarting the need for lower-priced ad-supported subscription tiers.

Hulu’s U.S. sign-up and cancellation rates now mimic those of Disney+, as its users increasingly purchase their subscription through the bundle. Almost one third (32%) of Hulu subscribers have bundled with Disney+, according to Ampere.

Disney+ also uses franchise title releases and its first live broadcast to drive subscriber sign-ups. The first large peak in daily sign-ups seen on Sept. 8, corresponded with Disney+ Day, the annual marketing event that features the release of exclusive premieres and the announcement of upcoming content. This year’s event saw the release of big franchise titles including Thor: Love and Thunder, Pinocchio and Obi-Wan Kenobi: A Jedi’s Return. The next large subscriber growth occurred on Sept. 19, with the premiere of the 31st season of “Dancing With the Stars,” and on Sept. 30, with the release of Hocus Pocus 2.

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