Apple and Paramount in talks to combine streaming services amid fierce competition
Apple and Paramount are reportedly in talks to bundle their streaming services at a discount — a possible bid to shore up subscribers amid brutal competition with rivals including Netflix and Disney+.
The entertainment rivals have talked about combining AppleTV+ and Paramount+ to create a package that would cost loss less than subscribing to both services separately, people close to the situation told The Wall Street Journal.
Most streamers offer subscriptions on a monthly basis, making it easy for viewers to cancel when they’re done binge-watching a specific show, The Journal reported, such as when Apple TV+ debuted “Greyhound” in July 2020.
When the hyped-up World War II movie starring Tom Hanks launched on July 10, 2020, AppleTV+’s daily US signups surged dramatically, to nearly 60,000. The day prior, there were just 8,500 new users, according to data from subscriber-measurement company Antenna.
By the following week, new AppleTV+ signups were back down to roughly 10,000 daily, Antenna reported, per The Journal.
Both AppleTV+ and Paramount+ had more than 7% of viewers cancel their subscriptions in October — known in the industry as a “churn” rate.
The figure topped the entire streaming industry’s 5.1% churn average last month, The Journal reported, citing Antenna data.
AppleTV+’s user base dipped as the company increased its subscription prices, though Apple insisted the move reflects its focus on adding higher-quality content and features to the platform.
As of late October, the per-month price of Apple TV+ ticked up by $3, to $9.99.
Paramount raised its streaming prices earlier this year after its first-quarter earnings came in lower than expected.
The price of Paramount+’s basic Essential tier is now $1 more than it was at the start of 2023, at $5.99, while its ad-free Premium tier, which also includes content from Showtime, was lifted from $9.99 to $11.99.
The Post has sought comment from Apple and Paramount.
Recently, streaming giants Netflix and Disney raised their prices as they look to boost growth amid intense competition.
Earlier this month, Netflix teamed up with another high-profile streamer, Max, to create a bundle as part of a deal with Verizon — a similar partnership to the one Apple and Paramount are expected to make.
As part of the agreement, Verizon is planning to offer the ad-supported versions of Netflix and Warner Bros Discovery’s Max streaming services for about $10 a month combined instead of about $17, The Journal reported.
The discounted bundle is expected to be formally announced in the coming weeks, the report said, citing people familiar with the situation.
Netflix and Warner Bros will have to share revenue with Verizon, per The Journal, adding that while the economic arrangement could not be learned, there is a minimum guarantee of revenue for the entertainment companies.
Netflix launched its ad-supported tier late last year and is expected to increase the prices for its premium ad-free tier to nudge more subscribers to the other tier, where commercials help bring in more revenue per user.
The only profitable major streamer, Netflix has resisted joining rivals like Walt Disney in hiking ad-free prices this year and instead curbed password-sharing outside households to tap the more than 100 million viewers who use its service without subscribing.
However, a report last month revealed that Netflix may raise the price of its ad-free options in the coming months after a slow start for its ad plan.
Its standard plan with ads costs $6.99 a month, while the ad-free plans start at $15.49.
