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Chronicles

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Overview of the state of bundles in 2020 across Netflix, Disney, Amazon, Apple, and Microsoft

Manage your Stratechery subscription.  —  If the famous Jim Barksdale quote is to be believed — the one about there only being two ways to make money in business, bundling and unbundling …

Stratechery Ben Thompson

Context & Ripple Effects

This Stratechery roundup lands mid-cycle in a running argument over who aggregates streaming. The groundwork was laid when Netflix stayed out of Apple's media bundle — a distribution fight Goldman Sachs sized at $12B+ for Apple's Services line — while Apple itself found that bundling does not guarantee demand: Apple News+'s 200,000 sign-ups in 48 hours failed to convert into sustained growth.

First-order effects

  • Apple and Amazon are positioned as the bundle-builders of 2020 — their video deal extends each one's reach as a storefront — while Netflix remains the holdout whose standalone pricing power is the whole bet.

Second-order effects

  • With the big services refusing to share a common user interface, smaller streaming services and telcos are pushed into the bundler role, competing to be the front door that Netflix and Apple each want to be.

Third-order effects

  • If the pattern holds, streaming consolidates around whichever players control interface and billing — the same bundle/unbundle cycle Jim Barksdale described, with subscription economics rewarding scale and punishing services stuck outside the winning bundles.

The trend: Streaming is cycling from unbundling back to re-bundling around whoever controls the customer interface and billing relationship.

Related: Bundle cannibalization · The subscription scale trap · Netflix · Apple · Interviews with media executives on streaming's future · Smaller streaming services and telco bundles

Related Coverage

Discussion

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    “80% of Prime subscribers start their product search on Amazon, and only 12% on Google, while that split is 50/50 for non-Prime subscribers” https://stratechery.com/...
  • @beastoftraal Karthik on x
    2020 Bundles - Good context-setting by Stratechery's Ben Thompson https://stratechery.com/... 1. Netflix: Bundle as Business Model 2. Disney+: Bundle as CRM 3. Amazon: Bundle as Churn Management 4. Microsoft: Bundle as Market Expansion 5. Apple: Bundle as Money-Maker
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  • @christian_humes Christian Humes on x
    This really shakes up next gen and makes Gamepass a ridiculous subscription. Between Obsidian and Bethesda if you play RPG games you'll be wanting a Xbox or PC. https://twitter.com/...