Video has long been recognized as a churn-buster in a bundle of communications services. Can an operator get churn benefits by managing video billing but not delivery?
Unified bill management more important than content discovery
At the StreamTV Show in Denver last week, many panelists thought there would be a grand rebundling of content. One reason offered for the shift was the viewer complexity in managing many different TV services. The complexity manifests itself in two primary ways:
- Difficulty in searching and discovering content across many services
- Difficulty in managing billing relationships with many service providers.
Amazon and Roku have tried to solve both problems by aggregating SVOD services within the Fire TV and Roku Channel environments. However, survey data from Bango suggests the billing issue is most concerning to viewers.
In a survey of 2,500 US adults in Q4 2022, the company asked participants what features they would like in their one app to manage their subscriptions. 77% of participants that subscribe to services said they wanted the ability to pay multiple subscriptions via one bill. Billing relationship issues, such as the ability to pause subscriptions or turn them on and off whenever they liked, also ranked highly. However, only 37% wanted to access all content within a single platform.
Verizon’s SVOD billing aggregation service
Verizon’s SVOD aggregation service, +play, was launched in late 2022. It allows its myPlan wireless customers to manage their bills from various SVOD services and pay for them through their wireless plan. Customers can manage their bills with 25 SVOD services, including Netflix Premium, YouTube TV, and Paramount+ Basic. They use the SVOD service app to view the content. Bango powers the Verizon +play aggregation service.
Service operators have long recognized the value of video in reducing churn in a bundle of communication services. With +play, Verizon is betting that owning the billing relationship – and not the viewing app – is enough for it to benefit from the churn-busting power of video.
Discount bundles help everyone
The +play service offers the SVOD services at their standard standalone rate, so its primary advantage is the convenience of a single bill. But the Bango survey data suggests that more than half of US adults want their one app to manage their subscriptions to also offer discounts on those subscriptions. Verizon is trying out discount bundles to see if they enhance the churn-reducing effect of +play.
In an unusual move, the company is offering a bundle of Netflix Premium and Paramount+ Premium with Showtime for $25.99 a month. Subscribing to the services separately costs $5.99 a month ($71.88 a year) more. At the StreamTV Show in Denver last week, I interviewed Jeff Shultz, Chief Strategy Officer and Chief Business Development Officer at Paramount Streaming, on stage, and he explained the logic behind the bundle like this:
“A bundled subscriber is a superior subscriber. We are going to see something different in terms of engagement or in terms of lower churn, better retention.”
Thursday, June 22nd, the nScreenNoise podcast will be my complete conversation at StreamTV with Jeff Shultz, Chief Strategy Officer, and Chief Business Development Officer at Paramount Streaming. Add the nScreenNoise to your podcast manager now, or check back with nScreenMedia later this week.
In other words, it makes sense for competitors Paramount+ and Netflix to work together in a bundle because both benefits from increased customer lifetime value (CLV) and reduced churn. The bundle helps Verizon, too, because it isn’t available anywhere else, meaning a wireless customer will lose the discount if they change operators.
If +play and discount bundles work, watch for other operators to try the approach.
