Have you ever felt like you have too many subscriptions? One for movies, another for TV shows, one for music, and maybe even one for sports. For a while, it seemed like every company had its own streaming service. But now, things are changing again. Companies are bringing back commercials and bundling services together. In this lesson, we'll explore why this is happening and what it means for you as a consumer.
Hook: What Am I Paying For?
Think, Pair, Share
Take two minutes to think about the questions below. Then, discuss your answers with a partner.
- How many streaming services (video, music, etc.) do you or your family subscribe to?
- Why did you choose those specific services? Was it for a particular show, movie, or feature?
- Are you happy with the cost? Do you think you're getting good value?
The Big Shift in Streaming
The world of streaming is experiencing two major changes: the return of advertisements and the comeback of bundles. Let's look at why.
1. Ad-Tiers Are the New Normal
For years, a major selling point for services like Netflix and Prime Video was the ad-free experience. However, in 2024, Prime Video introduced ads to its standard plan, requiring subscribers to pay extra for an ad-free tier. They weren't the first, and they won't be the last. Companies do this in order to create new revenue streams. Advertising money helps them fund expensive new shows and movies so that they can keep attracting new customers. For consumers, this means more choices: pay less (or nothing) but watch ads, or pay more for uninterrupted viewing.
Why Ads Are Taking Over Streaming
A short report from The Wall Street Journal explaining the business reasons behind the shift to ad-supported streaming.
Video Transcript
Briefing for Tuesday, October 11th. I'm Zoe Thomas for The Wall Street Journal. These days, the number of TV streaming services can seem endless: Netflix, Hulu, Disney+, Apple TV+, and on and on. And now, adding to those choices are bundle options—packages of multiple streaming or other services offered for one monthly fee. If it sounds familiar, that could be because the platforms are taking a page out of the playbook of the old cable bundles, but with a few key differences. Here to discuss those and why streaming giants are taking this route is our Deputy Media Editor, Jessica Toonkel. Hi, Jessica, thanks for joining me. [ 00:49 ]
So, to start off, why are platforms deciding to offer these bundles? You're seeing a few things happen here, but one of them is that over the past three years, all of the major entertainment companies have launched streaming services. So it started with Netflix and you had Hulu, then Apple TV+, you have HBO Max, you have Paramount+, you have Peacock—everyone has come to market with these streaming services. And now they have to really grow, so they're looking to partner up as a way to get customers quickly. [ 01:21 ]
Can you describe what some of these bundles look like? The bundles are kind of coming in different variations, right? So you have the mobile phone operators like a T-Mobile or Verizon that are offering their own bundles. So for example, if you're a subscriber of T-Mobile, you can get Netflix for free as well as Apple TV+ and Paramount+ for one year. Then you have kind of these retailers that are also starting to get into the bundle game. So Walmart has a program called Walmart+, which is the equivalent to Amazon Prime, is what they're trying to be. And Walmart recently announced a deal, which we broke, with Paramount+. So if you are a member of Walmart+, you now can get the ad version of Paramount+ for free for being a member. So those are the retailers getting into it. We've also heard that Costco has started to look into doing something similar. And then you have the tech companies that are doing it. So Amazon is known for its Amazon Prime Video Channels. So if you go to Amazon Prime Video Channels, you'll see you can access any app on one app. And the next step of that is they're also looking at offering pricing bundles, which means maybe you could get two streaming services at a discount than you would get them if you bought them separately. [ 02:44 ]
You mentioned, you know, phone services, retailers, tech companies that are all offering these bundles. I guess, you know, is that what makes it different from the old cable bundles that we're maybe a little more familiar with? I think that the thing about the cable bundle is that you were talking about over 100 channels, right? I mean, easily, for well over a hundred dollars a month. And people didn't like it because they were paying a lot of money for a lot of things that they weren't watching. Right now, these bundles are trying to be a little bit more targeted, more specific. They're not trying to be everything for everyone. They're trying to be like, "Hey, I'm Disney, ESPN+, and Hulu." That's one example of a bundle that you have. You have stuff for kids, you have stuff for the whole family with grown-ups, and you have sports. So they're trying to be more targeted and specific and not trying to be all things to all people. [ 03:36 ]
Financially, how is that shaking out for the streaming platforms? These are pretty complex deals to come about. First of all, the platform pays the streaming service. So for example, Walmart pays Paramount+ two to three dollars per subscriber that actually activates their service. So you have to really make sure that each partner is invested in what they're doing, right? Like, you can't just sign a deal and hope everything goes well. The Walmart-Paramount+ deal, we reported, it took over a year to negotiate. Each company came in with what their marketing agenda would be, what it would look like. Walmart is marketing it in its stores. If you go in, you see, you know, "Paw Patrol" and "Top Gun" and all of their TVs. So these are pretty complex deals that involve various parts of the business because the thing is, when you go into these deals, you're not going to get as much per subscriber as if they were paying full price. But your hope is that the volume will make up for that, and then if you have an ad-supported service, you'll make up revenue through them looking at more ads and buying products and so on. [ 04:46 ]
What does this all mean for customers then? I think the goal for customers is making it a little bit more simple. And hey, if you can get a streaming service for free here or there, that's great. I mean, right now, it's not clear that all customers know that they can get everything. You know, I spoke to quite a few individuals who had access to certain streaming services through, you know, a T-Mobile account or whatever it was and didn't realize they had it. So there is a concern that, you know, it may cause more confusion than it is meant to. But for the savvy consumers who seek out these bundles, you can get some good deals. [ 05:26 ]
So kind of thinking forward, this kind of great rebundling, offering all these different monthly services that we have options to, what does it mean for streaming going forward? Is it a sign that maybe it's going to be a market that's shrinking or consolidating? I think this partnership mentality that you're seeing now, where everyone's kind of looking for a dance partner, is kind of like—I'd like to think of it as like the second phase of the streaming wars. The first phase was everyone launching. Now it's like everyone partnering and bundling and figuring out who their dance partner is going to be. And then the third phase will be M&A, where you'll see companies start buying other companies. There's a lot of reasons that's not happening right now—the regulatory environment, the markets—so partnerships make sense. And what's a better way to figure out if you should engage in merger talks with someone than to partner with them? [ 06:18 ]
All right, so phase two of the streaming wars. Jessica Toonkel, our Deputy Media Editor, thanks so much for joining us. Thanks for having me. And that's it for today's Tech News Briefing. For more tech stories, check out our website, wsj.com. I'm Zoe Thomas for The Wall Street Journal. Thanks for listening. [ 06:37 ]
2. The Bundle Is Back
Remember when you used to buy cable TV and get dozens of channels in one package? That's a bundle. Streaming companies are now doing the same thing. For example, in 2024, Disney combined its Disney+ and Hulu content for subscribers in the U.S. This strategy is called consolidation. By bundling services, companies hope to offer more value so that customers are less likely to cancel their subscriptions. A single, combined bill is also more convenient for many users. If companies create attractive bundles, they might keep subscribers for longer.
Vocabulary
Understanding the business of streaming requires some specific vocabulary.
| Word | Definition | Example |
|---|---|---|
| Subscriber | A person who pays to receive a service or product regularly. | Netflix gained two million new subscribers last quarter. |
| Tier | A specific level of service with a set price and features. | The premium tier includes 4K streaming and no advertisements. |
| Ad-free | Without any commercials or advertisements. | I paid an extra $3 for the ad-free version of the app. |
| Bundle (n.) | A package of several products or services sold together at a single price. | The telecom company offers a bundle that includes internet, TV, and a phone line. |
| Consolidate (v.) | To combine several things into a single, more effective whole. | The company decided to consolidate its two streaming platforms to save money. |
| Rationale (n.) | A set of reasons or a logical basis for a course of action or a belief. | The rationale for the price increase was to cover production costs. |
Language Focus: Making Recommendations
When discussing options and giving advice, it's useful to talk about probability and purpose.
Conditionals & Probability (might, could, likely)
We use modal verbs like might, could, and the adverb likely to talk about possibilities and probabilities. This is common in conditional sentences (if...).
- Might/Could suggest a possibility (it's possible, but not certain).
- Likely suggests a strong probability (it will probably happen).
If you choose the cheaper ad-supported plan, you could save a lot of money over a year.
If a company consolidates its services, it's likely that the subscription price will change.
They might offer a discount if you sign up for the annual bundle.
Purpose & Result (in order to, so that)
We use these phrases to explain the reason or purpose for an action.
- In order to is usually followed by a base verb. It explains the purpose of an action.
- So that is usually followed by a clause (subject + verb, often with a modal like 'can' or 'will'). It explains the purpose and intended result.
Prime Video added an ad-free fee in order to generate more revenue.
Disney created a bundle so that users can access all their content in one place.
You should compare the tiers carefully in order to choose the best one for your budget.
Marketplace Lab: Design a Student Bundle
Group Task
Work in small groups of 3-4. Your task is to design the perfect streaming bundle for a university student. You must choose ONE service from each category below. Then, prepare a short, three-line rationale for your choices.
- Choose one video streaming service: (e.g., Netflix, Disney+, Prime Video, Max, etc.)
- Choose one music streaming service: (e.g., Spotify, Apple Music, YouTube Music, etc.)
- Choose one sports streaming service: (e.g., ESPN+, DAZN, FuboTV, etc.)
Prepare Your Rationale (Speaking Only):
Prepare to explain your bundle to the class in about 60 seconds. Your rationale should cover:
- Price: Why is the total cost good for a student? (Consider ad-tiers vs. ad-free).
- Ads: Did you choose plans with or without ads? Why?
- Content: Why is this combination of content the best for a student lifestyle?
Be ready to share your group's bundle and rationale with the class.
Exit: The 90-Second Buyer's Guide
Pair Role-Play
Work with a partner. One person will be Student A, and the other will be Student B. After one round, switch roles.
Student A: You are a new international student at the university. You want to sign up for streaming services but feel overwhelmed by the choices. Ask Student B for advice. Use these questions to help you:
- "Which streaming service do you think is the best value?"
- "Should I pay extra for ad-free, or is the ad version okay?"
- "I like watching movies but also live soccer. What should I do?"
Student B: You are a helpful classmate. Listen to Student A's needs and give them a 90-second "buyer's guide." Give a clear recommendation for one or two services. Use the language from today's lesson:
- Use at least one conditional with might, could, or likely.
- Use in order to or so that to explain a reason.
"If you get the Disney+ bundle, you'll likely have enough shows to watch. They combined it with Hulu so that you get more content for one price..."