Media companies face some challenges but bundling is a solution—not a problem.

I thought about this when reading this recent Deadline op-ed which argued that streaming bundles replicate the flaws of cable again.

As streaming bundles proliferate, competition among them will drive innovation and affordability. I think bundles can be outrageously accretive and we’re just at the beginning. Although there are many more, three reasons they are superior come to mind for me: personalization, bundle innovation and advertising realignment.

Personalization increases engagement with smaller libraries

Machine learning and AI enable bundles with smaller libraries to create more engagement. By tailoring recommendations to user preferences, smaller libraries can bubble up the most relevant content from deep in their catalog, ensuring viewers needs are met without as many options under the surface. In the old cable model, we had access to hundreds of channels but only tuned in to a handful and only a fraction of the media cos’ libraries could even air at a time. When streamers begin (actually, truly) relying on personalized homepages and merchandising, they will be able to cater to viewers’ interests with less content. And even start green lighting against those signals. That means I could meet my family’s needs by subbing to a sports, movies and kids bundle with less total content — but as much (or more) viewing hours for me as a consumer. Why would people pay less wallet-share for this?

Innovative bundles cater to consumers (and contribute $$$)

As media companies rushed DTC, they began foregoing other windows to consolidate audience. This is only the beginning of streaming; media cos will inevitably evolve to find windows again. If bundles proliferate, they can begin to cater to different consumer needs, each supporting a new window. Consumer needs can span interest, price point and even cross-industry businesses– hardly any of these are fully explored. Niche bundles are already a thing (Shudder, Crunchyroll, Hallmark) and many more are obvious: kids, sports, news, short form. That’s without any real innovation yet. For instance, a “low-latency live + gambling” bundle could command a window for some sports. What other industries outside of streaming could be integrated into a bundle? Health tech, GenAI, consumer products, gaming… Niche bundles offer a way to monetize underrepresented audience segments while spreading risk across a diverse portfolio of content, ensuring more stable revenue streams for media companies.

Streaming advertising will eventually re-align with viewership

It may take more time, but advertising dollars will come back to TV as the marketplace becomes more efficient. The piece makes an argument that TV was bloated with ads in the late 2010s and Google/Facebook have captured ad demand. Advertising dollars follow viewership, and while viewing habits have shifted, the total audience remains constant — eyeballs don’t disappear, they go somewhere. Indeed, people are watching less linear TV… but that viewing has shifted to streaming TV. Some leisure time has gone toward gaming and social media; but streaming TV + linear TV still commands the majority of entertainment time spent across all age groups. Even though ads are being bought through Goog/FB/Amazon, this doesn’t mean viewership resides on Google search and facebook.com. Amazon is a great example where their ad growth is in Prime Video… which is a bundle that’s ad-supported. These are platforms that ultimately sell (or will sell) those CTV eyeballs. For competition and consumers’-sake, expect them to optimize frequency, encourage dynamic creative and innovate new formats. As market efficiency returns to TV advertising, those dollars will return to media companies.