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Bundling Cable and Internet: Is the Traditional Bundle Poised for a Comeback?

July 1st, 2019   ||    by Todd Wasserman

Streaming-only viewers who thought they were getting a good deal may want to re-examine their bills.

Internet-based TV at first seems to be a cheaper option than cable. But, according to NBC News, the average internet bill is $68 a month. If you sign up for the top streaming services (Netflix, HBO Now, Hulu, and Amazon Video), then you’ll pay over $100 every month. That’s nearly as much as the average $120 a month for bundling cable and internet.

Such calculations have prompted some to predict that the traditional TV bundle is poised for a comeback. This scenario imagines a viewer who realizes that they are paying roughly the same for a hodgepodge of streaming services compared to a traditional TV bundle. Wouldn’t such a viewer opt for a traditional TV bundle instead?

Looking a Few Years Ahead

The scenario rests on the belief that now is a time of unprecedented change in media. For instance, Disney is not only going to become a majority shareholder in Hulu, as Vox reported, but is planning to launch streaming service Disney+ later this year. According to The Verge, Warner Media is planning to launch a streaming service in September or October of this year.

Meanwhile, The Verge also noted that Apple is expected to introduce its Apple TV Plus streaming service this fall. All told, there are now at least 10 streaming services including Netflix, CBS All Access, and YouTube TV, according to PC Magazine.

It’s not hard to imagine a world in which streaming services compete on content, much like the networks used to. Depending on how expensive the services are, certain households may become aligned with Disney and others with Warner. Bundles can compete on price. Some will be prohibitively expensive for many, so lower-priced options will be available, mirroring the current choices.

Live TV

Perhaps the key element differentiating each offering will be live TV. In a world in which everyone has potential access to catalogs of every TV show, live TV would be the only distinction. Of course, the media companies will likely complicate this. If Warner offers Major League Baseball and Apple streams National Football League games, then viewers will be forced to pick and choose again.

At the moment, YouTube TV and DirecTV Now offer most of the major networks for $50 a month, according to CNET. From there, the choices get slimmer. You may find that bundle meets most of your needs, but you still have to pay extra for Showtime or the Tennis Channel.

Consumers may embrace a mostly à la carte model that includes a basic cable package like Sling TV (which omits CBS, ABC, Fox, and NBC) and pay for whatever else they want to stream.

Is Bundling Cable and Internet the Future of TV?

Network TV has proven durable in light of recent competition. “Advertisers have once again indicated their confidence in national TV remains very strong, despite issues regarding rising commercial clutter, rating fragmentation and outdated targeting mechanisms,” Ed Papazian, president of Media Dynamics, told MediaPost.

In an interview with Broadcasting & Cable, Papazian suggested that while the landscape is in flux (“new targeting mechanisms” and “audience attainment platforms”), TV still reigns supreme, which means the traditional TV bundle is a win-win for both viewer and advertiser.

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