Disney bundling found to lower churn in US

Disney bundling found to lower churn in US
Disney show The Bear (credit: Disney)

US subscribers who have a bundle of Disney+, Hulu and ESPN+ are 59% less likely to churn than those who subscribe to only Disney+, new research has found.

Ampere Analysis found that 70% of consumers in the US who subscribed to Disney+ alone churned again in 12 months, while this figure was just 29% for those subscribing to Disney’s bundle of Disney+, Hulu and ESPN+.

This behaviour was observed in “re-subscribers” — or those who had previously subscribed to Disney+ alone or the bundle in Q1 2023.

Ampere’s survey highlighted a tendency for users to rapidly cycle between cancelling and re-subscribing to services, with nearly half (42%) of them agreeing that they “often” subscribe, cancel and re-subscribe to streaming services so that they only pay when there is something they wanted to watch. This was particularly prevalent among 18-44 year-olds and family households.

The lower churn observed in those with bundles would suggest this “toggle behaviour” from consumers applies less when they have multiple services in one contract.

Analysis: Similar UK trends

In the UK, this toggle behaviour with subscription VOD (SVOD) platforms has also been observed, with more consumers getting used to turning services on and off to save money, choosing to wait to watch content on specific platforms in one go when they re-subscribe.

While the Disney, Hulu and ESPN+ bundle is unavailable in the UK, Dan Monaghan, research manager at Ampere Analysis, told The Media Leader that churn was “consistently and substantially lower” for those who bundled Disney+ with their pay-TV provider than users who signed up directly, based on UK sign-ups in H1 2023.

In the UK, Disney+ can also be bundled into mobile contracts with O2, Tesco Clubcard and some Lloyds Bank accounts — all of which tend to be held for longer than a typical SVOD subscription.

Independent analyst Ben Keen highlighted that Ampere’s research confirmed findings from a study from Antenna that showed the US Disney bundle reduced churn by up to six percentage points.

While there was “little potential” for a similar Disney bundle in the UK, with Hulu and ESPN being US-centric services, Keen told The Media Leader that the general principle of bundling was “a sound strategy”. Indeed, this would suggest more bundling options could soon be coming to the UK.

He stressed, though, that it depends on who is doing the bundling, what price discounts are offered and whether this involves cannibalisation to existing services with higher margin — something that “always has to be a careful calculation”.

Keen added: “There are a number of other bundling initiatives in the US, including the Venu sports streaming bundle of ESPN, Fox Sports and Warner Bros Discovery, and separately a streaming bundle of Disney+, Hulu and Max. I fully expect you will see more initiatives of this type over this side of the Atlantic also.”

Media Jobs