Disney and Warner Bros. Streaming Bundle: Defeating Its Own Purpose
- May 17, 2024 05:05am
- 393
The bundling of streaming platforms by Disney and Warner Bros. has been criticized for not living up to its initial promise, with one expert arguing that it "defeats its own purpose."
![Disney and Warner Bros. Streaming Bundle: Defeating Its Own Purpose](https://a57.foxnews.com/cf-images.us-east-1.prod.boltdns.net/v1/static/854081161001/c9e0610d-73b8-40a5-9e4e-90ff18c60785/8d96d5fa-e3b2-4428-b29d-3384dbc53dac/1280x720/match/896/504/image.jpg?ve=1&tl=1)
Bobby Iaccino, co-founder of Path Trading Partners, has expressed concerns about the effectiveness of bundling streaming platforms, specifically citing the recent move by Disney and Warner Bros. to combine their services. Iaccino believes that this consolidation undermines the original goal of streaming services, which was to provide consumers with more choice and flexibility.
Disney CEO Bob Iger has identified investing in technology as a key strategy for making streaming a profitable business. He emphasized the importance of user-centricity, stating that "in order for us to turn streaming into a profitable business, it has to have a user first mentality."
![Disney and Warner Bros. Streaming Bundle: Defeating Its Own Purpose](https://a57.foxnews.com/static.foxbusiness.com/foxbusiness.com/content/uploads/2024/02/1440/810/disney-plus-logo-remote.jpg?ve=1&tl=1 2x)
Disney's combined streaming business, encompassing Disney+, Hulu, and ESPN+, has been edging closer to profitability. However, Iger acknowledged that marketing expenses have been excessive due to the lack of technology to personalize messaging and identify subscribers at risk of canceling.
Iger pointed to Netflix as an example of a company that excels in this area, lauding its "brilliant" approach. He has previously described Netflix as the "gold standard" and expressed Disney's need to match its technological capabilities.
![Disney and Warner Bros. Streaming Bundle: Defeating Its Own Purpose](https://a57.foxnews.com/static.foxbusiness.com/foxbusiness.com/content/uploads/2023/10/1440/810/567aad3d-4.jpg?ve=1&tl=1 2x)
Making technological investments will allow Disney to reduce its marketing expenditures, according to Iger. He stressed the importance of customizable and dynamic user experiences, with artificial intelligence playing a pivotal role.
Other critical factors for Disney's streaming business include increasing engagement and curbing password-sharing. The company has recently integrated Hulu into Disney+ for some users and plans to do the same with ESPN+ later this year.
![Disney and Warner Bros. Streaming Bundle: Defeating Its Own Purpose](https://a57.foxnews.com/static.foxbusiness.com/foxbusiness.com/content/uploads/2022/10/1440/810/Disney-2.jpg?ve=1&tl=1 2x)
To address user churn, Disney is implementing a password crackdown in certain markets, similar to the approach taken by Netflix last year. Engagement helps mitigate churn, which is a challenge faced by all streaming services.
Disney projects profitability for its combined streaming business in the fourth quarter and long-term profit margins in the double digits. Its platforms collectively boasted 228.6 million subscribers at the end of the second quarter.
However, Iaccino argues that bundling platforms defeats the purpose of streaming, as it limits consumer choice and creates a new monopoly. He believes that consumers would be better served by a competitive market with individual platforms vying for their attention.
Critics of the Disney-Warner Bros. bundle also contend that it could stifle competition and innovation, as smaller streaming services may struggle to compete against the giants. They argue that the consolidation of the streaming market undermines the original intent of streaming, which was to provide consumers with more choice and flexibility.
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