Apple + CBS: Breaking Down Streaming’s Bargain Bundle

Apple + CBS: Breaking Down Streaming's
Cheyne Gateley/Variety Intelligence Platform

Thanks to a new partnership between Apple and ViacomCBS, three streaming services that would cost $26 per month sold separately in the U.S. are now available for $15 as a bundle. A discount that steep may not seem to make economic sense, but this bargain is a logical play in the crowded streaming wars.

The timing for combining Apple TV+, CBS All Access and Showtime couldn’t be better, as there’s been an explosion of streaming activity during the pandemic. But a lot of market entrants are also clamoring for an audience that has more time on its hands but not necessarily more money, given growing economic hardships. There are only so many streaming services cash-strapped consumers will pay for, so discounting gets Apple and ViacomCBS closer to the front of that line.

Apple is hoping this will get more people to sample Apple TV+. The company has yet to break out any specific numbers on how its streaming service is doing, but a new survey YouGov provided exclusively to VIP points to the fact that AppleTV+ simply was not the kind of out-of-the-box hit that Disney+ was.

So the hope is by joining forces at a discounted rate with another company looking for new subscribers, both of their audiences will grow.

The bundling strategy we’re seeing from Apple may be a big part of what the company is doing to set Apple TV+ apart. There were reports last week that Apple is also considering a different kind of bundle — reportedly being referred to internally as Apple One — that could bring together Apple TV+ with Apple Music or Apple News+.

These are the kind of moves a single-revenue company like Netflix can’t match. Done right, it’s a nice competitive advantage.

The expectation is we could see an Apple One announcement later this fall, when the company is expected to unveil new hardware. It makes sense as Apple looks to offset declining hardware sales with sales generated by its Services business, which is coming under pressure now given the growing chorus of developers arguing Apple takes too steep a cut of revenues in its App Store.

The big question is, Will CBS be just the first company with which Apple does this kind of bundling? If that’s the case, it would have major implications because with enough bundling you start to compete with pay-TV channel packages at a time when cord-cutting is pretty rampant.

And Apple may not be the only one prepared to do that, given how Amazon Prime and Roku already enable subscribers to add additional channels to stream.