RZ Ep. 44: Giles Tongue - Bundling: The Future of Sports Streaming and Subscription Retention

For episode 44 of Retention Zone , I sat down with Giles Tongue from Bango to discuss the evolving landscape of sports streaming subscriptions and the growing trend of content bundling. Their conversation revealed fascinating insights into consumer behavior, challenges in the current subscription model, and potential solutions for both viewers and content providers.

He recently worked on a report on subscribers sentiment which you can find here: https://bango.com/resources/subscription-wars-global-trends/

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The Fragmentation of Sports Broadcasting

One of the key issues highlighted in the discussion was the increasing fragmentation of sports broadcasting. Tongue pointed out that sports fans often find themselves needing multiple subscriptions to access all the content they want to watch. This fragmentation has led to some interesting statistics:

"Sports fans are the most prolific of subscribers. So in our data, it says that seven average subscriptions versus four and a half in America is typical for sports fans. And that also means they're spending more. So they're spending $120 instead of 77 as the average."

This fragmentation not only affects viewers' wallets but also their ability to access desired content. Tongue revealed that "54% of people paying for sports services cannot afford all the subscriptions that they would like." This statistic underscores a significant problem in the current sports streaming landscape – a substantial portion of the audience is unable to access all the content they want due to financial constraints.

The Olympic Challenge

The discussion touched on the recent Paris Olympics, which highlighted some of the challenges in sports broadcasting. Tongue noted that many viewers were caught off guard by the need to subscribe to additional services to access full coverage:

"29% of US subscribers [were] going to subscribe to a new service just to watch the Olympics. But if I speak from a personal point of view, in the UK, we're so used to the multi-screen experience from BBC iPlayer and that was actually somewhat diminished because a lot of the coverage, the kind of full extent range, was over in an SVOD's location."

This shift in Olympic coverage demonstrates the ongoing evolution of sports broadcasting and the potential for viewer frustration when faced with unexpected subscription requirements.

The Rise of Bundling

As a potential solution to the fragmentation problem, Tongue discussed the growing trend of content bundling. He emphasized that bundling can benefit multiple parties:

"It's a win-win-win. So the telcos are winning or the resellers are winning because they're able to drive up their net promoter score. It's a new revenue stream, average revenue goes up, so no problem there. The subscriber we've talked about, they're able to manage and get greater flexibility and control over their subscription situation. For the content provider, they're now able to leverage these content hubs that are being created so they can leverage the reach and the marketing efforts of those huge telco companies to find and acquire more customers."

Bundling as a Retention Strategy

One of the most intriguing aspects of bundling is its potential as a retention strategy. Tongue noted that bundling could lead to increased customer loyalty:

"When a telco is offering bundles and that could be a mobile operator, ISP, broadband provider, the more services that are bundled, the more services somebody takes, the more loyal they are. So there's a retention benefit."

This observation suggests that bundling could be a powerful tool for both content providers and distributors to reduce churn and maintain a stable subscriber base.

Emerging Trends in Content Bundling

The conversation also touched on some emerging trends in the bundling space. Tongue mentioned the creation of content hubs by major telecommunications companies, such as Verizon's Plus Play:

"Let's think of Verizon plus play, if you haven't seen it, 45 different types of content from SVOD to productivity gaming, all managed in one place and provided to the customer. That's actually creating a unique environment where companies that previously would have been absolutely isolated and selling direct to consumer or selling through the app store are now coming together and being sold together."

This trend towards super bundling could potentially address the issue of subscription fragmentation by providing consumers with a single point of access for multiple services.

Content Provider Collaboration

An interesting development noted by Tongue is the emerging trend of content providers collaborating directly to create bundles:

"Another interesting emerging trend that we're seeing is content provider with content provider bundles and they're doing it themselves on their own websites. Can you imagine a few years ago that happening? This kind of collaboration is really being driven by market forces, I think."

This shift towards direct collaboration between content providers could potentially reshape the streaming landscape, offering new opportunities for both providers and consumers.

Looking to the Future

As the interview concluded, both me and Tongue acknowledged that the subscription streaming market is in a state of flux. The effectiveness and sustainability of bundling strategies will likely become clearer in the coming years.

I noted: "I think it's a moment where we have to see these things running down the market and measure them, maybe in 18 months, two years, to see if they're sustainable, that people are staying in the bundle or escaping, or who's controlling the bundle."

This episode of Retention Zone provided valuable insights into the challenges facing sports streaming services and the potential solutions offered by content bundling. As the market continues to evolve, it will be fascinating to see how these trends develop and how they impact both content providers and consumers in the long term.

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Retention Zone is hosted and produced by Carlo De Marchis (A guy with a scarf)