Gird Your Loins For The “Great Rebundling”

Graphic by mikemacmarketing, CC BY 2.0 <https://creativecommons.org/licenses/by/2.0>, via Wikimedia Commons

Ah, the perfect, unclouded days of just buying your entertainment needs in bundle and whistling a happy tune as the perfect union of corporate and personal interests conjoined to produce joy and contentment across the fruited plain.

Yeah, that never happened.

Folks who lived through it can explain why streaming created a bum rush to get rid of cable bundles and use the evolving streaming technologies to have more choice. Also predicted by just about everyone, at some point that pendulum was going to come back looking for a way to get diverse customers back into neatly defined boxes. Or, more to the point, more stable revenue streams for the streaming platforms.

This is a long rip but Sonny Bunch really gets into some important points here:

The recent history of television looks something like this: Tired of three networks, consumers flocked to cable companies, which bundled together dozens, then hundreds of channels. But most customers came to realize they watched only a handful of these channels. They grew frustrated, demanding to know why they were paying for things they weren’t using. So the Great Unbundling began: People could get individual channels via streaming or cheaper packages on YouTube and pay only for what they wanted to watch.

Between the increasing cost of high-speed internet and the proliferation of streaming subscriptions — Netflix, Hulu, Disney Plus, HBO Max, Apple TV Plus, the Criterion Channel, YouTube, Shudder, Paramount Plus, Peacock, etc. — costs haven’t really gone down all that much. People wind up paying a little less, maybe, but at the cost of having radically fewer choices. What’s interesting about this is how little most folks really seem to mind the trade-off.

Only part of this is economic. A much bigger part has to do with self-conception and identity: People simply don’t want to associate, even tangentially, with channels or products they don’t like.

We’ve seen this for years, on the left and on the right. It was at least part of the argument made both by conservative-minded parents groups frustrated by the proliferation of boundary-pushing channels such as FX and by progressives angry at Fox News’s dominance in the cable news ecosystem. People, they said, shouldn’t be forced to support channels or programs they find offensive. That these channels didn’t cost consumers very much doesn’t really matter. Their objections were ideological — a signal against the coarsening of the culture or the degradation of the discourse.

The phenomenon isn’t limited to entertainment, of course. Just last week, The Post reported on Cracker Barrel customers who were angry that plant-based Impossible sausage had been added to the menu. It’s important to note that the pork sausage Southerners have enjoyed for generations hadn’t been removed from the menu. Customers were merely angry that they had to associate, however indirectly, with something enjoyed by their out-group.

This is at least one reason Warner Bros. Discovery may be making a mistake when it considers plans to merge HBO Max and Discovery Plus into a single streaming service. Most HBO Max subscribers probably don’t see themselves as “Discovery people,” nor vice versa. After all, HBO remains best represented by the tagline “It’s not TV, it’s HBO.” Discovery Plus, meanwhile, is the absolute lowest common denominator of TV: cheap reality programming on HGTV and the Food Network combined with reruns on A&E and whatever TLC, formerly known as The Learning Channel, has evolved into.

HBO Max and Discovery Plus can coexist on the same home screen. (My family’s Apple TV is proof of that.) Even packaging both together as a deal — similar to the one that Disney offers to subscribers of Disney Plus, Hulu and ESPN Plus — makes sense as something people can opt in to. But merging them into one, and only one, location makes less sense, just as merging the Disney-owned trio into one app would make less sense for families who only want the animated Bluey or millennials who only want FX on Hulu.

In an age of niche entertainment and supreme customization, people get almost angry when something they don’t want or don’t identify with is forced upon them. Think back to one of the foundational lessons of this age: the debacle that was U2’s “Songs of Innocence,” a terrible misstep by Apple and the Irish rock group that involved putting the album — for free but without warning— onto every iTunes account.

Most customers weren’t happy about getting a gratis surprise. Rather, they saw it as a violation of the sanctity of their music library, the purest and most private distillation of their own tastes. If you weren’t a “U2 person,” this was almost an act of aggression on the part of Apple and Bono, one that lingers in the collective memory.

In an age of niche-dom, even a gift from the biggest band (or brand) can be an unwelcome intrusion.

Entertainment conglomerates seem to be forgetting that as they move closer to making people pay for properties they don’t identify with.

Which is really the point that has been at the core of marketing and business for as long as there has been marketing and business: how do you get people to pay for something whether they like it or not? The traditional marketing response is pairing the unwanted thing with a wanted thing. Or bundling, as Flo would say in those omnipresent insurance ads. The inescapable answer, though, is that while consumers might for a while, unless it is something absolutely necessary, eventually folks will find a way to not pay for what they don’t want to pay for. Streaming is no different. Once you move that truth into the realm of highly subjective and fiercely competitive world of entertainment, you have a dual pronged problem of trying to make media both mass and niche at the same time. While the Disneys and Paramounts of the world have more than enough content to do both, others are scrambling to figure out the balance between the two, and if going all in on one or the other would be a better solution.

There is going to be a never-ending tug-of-war between streaming developing into whatever it is going to be and the content creators that platform their wares on them, with the customer/audience as the rope. The big companies have all sorts of plans, but the variable in all those – as Netflix and others have learned the hard way – is the audience/customers. Mass niche media is a unicorn that isn’t going to be catchable, but it sure seems like millions of dollars are going to be spent on trying.

We are all different, and our entertainment consumption is a melting pot where our differences and similarities meld and contrast. Unlike Sonny, I love me some Food Network and HGTV, and would far rather watch that than go to a movie in a theater. If I absolutely have to slog through HBO’s often overwrought, overly self-important and overpriced content then I’m probably not going to watch to get to my Guy Fieri; I’ll adapt and overcome.

But we haven’t quite got there yet.