Is Streaming Aggregation the Next Cable Bundle? Cable Weighs In

Cable operators are moving increasingly toward acting as over-the-top video service aggregators, often as a way of replacing the lost customer stickiness due to ongoing cord-cutting of traditional linear video packages. Cable executives, analysts and others tell us that probably will someday replace the linear programming bundle, though not soon.

As cable has moved to being broadband-centric, it's largely indifferent about whether its own streaming video service drives that or some other OTT service, Moody's analyst Jason Cuomo told us. But there are business advantages to having multiple business relationships with a customer, and cable operators are natural aggregators of content, having been in an intermediary position on video for decades, he said. Still to be seen is whether profit can be made bundling streaming services because there's uncertainty on such issues as revenue sharing, he said. However, streaming video aggregation could still be useful as a loss-leader if it drives more broadband consumption, he said.

"A proposed cycle of reaggregation is increasingly likely," especially as the current fragmented subscription VOD marketplace with numerous competing services "takes its toll on the performance of all of them," PricewaterhouseCooper said last month in its 2022-2026 media and entertainment outlook. It said SVOD services need a neutral aggregator to serve as consumer gatekeeper.

That ability of users to bundle subscriptions to various third-party subscription VOD services helps reduce the churn rate, PwC said. Providing multiple services, including broadband, lets cable "support a base of low-cost TV ... 'pay-lite,'" it said. Being at the center of consumer video, cable can let customers sign up for OTT services through a single package and allow integration of these services through pay-TV set-top boxes and platforms, it said. That in turn lets cable navigate cord cutting and cord trimming, it said. "Retaining these now lower-paying subs means that as the rebundling of third-party services occurs, cable TV will be able to recoup these losses," it said.

"A new aggregator role could help put the joy back into the streaming experience," Accenture said in a report earlier this year.

Cuomo said OTT access via cable service would be more valuable to new streaming entrants or smaller services, as major streaming services don't necessarily need that added access to cable operators' or telcos' tens of millions of subscribers. Consumers like the idea of aggregated streaming content, he said, noting the success of Roku and other streaming media service/device offerings and Comcast's Xfinity X1 platform. He said making content choices and pricing simpler is the goal of a lot of companies.

An executive at a regional cable operator told us that with broadband being the growth driver and the proliferation of direct-to-consumer video options, the natural evolution for cable companies is to sell connectivity and help customers access content. Being able to also offer universal billing facilitates discounting and bundling opportunities, he said. He said the ultimate goal is for customers to be able to go to the cable company's website, sign up for broadband and different video services, with the cable operator able to cross-subsidize or discount if multiple video services are subscribed to, making the cable company's ecosystem stickier.

More than 100 cable, telco and fiber broadband providers and numerous streaming services including WideOpenWest, Frontier and CenturyLink have signed up in the past couple years with MyBundle.TV -- a content search and recommendation platform whose aim CEO Jason Cohen told us is to provide a variety of customer experience services ranging from recommendations and universal search to universal sign-up and billing. Smaller cable operators lose money on video and bear the brunt of customer anger at issues like rising prices, and there's a growing shift away from being the bad guy and trying to be a conduit for customers to figure out what subscription VOD or virtual MVPD services they need, Cohen said.

Many see the Comcast/Charter streaming platform joint venture (see 2204270057) heading toward that goal. Cohen said Comcast and Charter likely will offer their platform for use by other cable operators. The two didn't comment.