The true extent of the seismic changes rippling throughout the global subscriptions economy has been revealed after a report found that fully 20% of all streaming video subscriptions are now sold through bundling partnerships with telcos.
This growth in bundling has been driven by telcos long-term strategic desire to expand beyond their core data and voice services. And with consumers demanding ever greater flexibility and choice, it’s expected that this number is set to grow even further – to a quarter (25%) by 2028 – as the subscriptions market continues to evolve.
That’s according to a new report from independent analysts Omdia, compiled in partnership with Bango, which highlights the pivotal role telcos play in the growing subscriptions economy.
The report — Super Bundling: What telco leadership needs to know about securing a wider role in the subscriptions market — is based on one-to-one interviews with top decision-makers at telcos in Asia, Europe, and North America.
And it concludes that Super Bundling — which revolves around a centralized subscriber-centric subscriptions hub — is gaining real traction.
“Telco Super Bundling is a new kind of offering that is emerging allowing consumers to subscribe to a wide array of services via a single place, for easy management and content discovery, as well as price discounts,” said the report.
“Unlike tech-giants’ walled garden bundles, telco Super Bundling can span any number of services from any number of providers, on a pick-and-mix basis,” it said.
Super Bundling revenues set to soar
Omdia estimates that revenue from video, music and other subscription-based services sold via telcos will hit $24.8bn this year before almost doubling to $42.8bn in 2027 with streaming video-on-demand (SVOD) subscriptions now ranking as the number one bundle for telcos looking to boost acquisition and retention.
And while it predicts that this year 20% of online video subscriptions will be derived from telco bundling globally, in regions such as Latin America and the Caribbean, Super Bundling is expected to make up nearly half.
At the end of March, Omdia identified over 1,600 partnerships in existence between telco companies and major streaming brands, with Paramount+, Disney+, HBO Max and Netflix among the brand leaders.
And it’s not just video services that look set to dominate. Non-video/music services — such as e-books, health and fitness, and education — look set to see revenues rocket from 4.8% in 2016 to 29% in 2027.
By increasing the breadth and depth of services that telcos can offer to customers, Super Bundling gives them a uniquely powerful ability to drive deeper customer engagement.
Omdia’s assessment is based on years of insightful industry analysis, during which time telcos have become major distributors of video and music streaming subscriptions. It argues that Super Bundling is now a major weapon in their armory as they look to address consumer churn and falling consumer revenues (ARPU).
Indeed, Super Bundling opens up major new opportunities for telcos to drive deeper consumer engagement. With greater breadth and depth of subscriptions services available, Super Bundling gives telcos the powerful ability to easily create multi-service bundles that can be tailored to a huge range of customer-centric and personalized to interest segments.
Super Bundling is key to customer acquisition and retention
For those looking to address these issues, Super Bundling provides a cost-effective way for telcos and subscription providers to acquire new users.
All this comes as the global subscription streaming market is expected to grow by a sizable $268 billion, an 81% increase, within the next three years.
“There are compelling market drivers for Super Bundling,” said the report, “not least consumer subscription fatigue and telcos’ dire need to differentiate and boost revenue.
“Not only can it be a churn buster – the more services telcos get customers to subscribe to, the more stickiness they create – but can also turn into a revenue stream in its own right,” it said.
The analysis is clear. By bundling streaming subscriptions with their core offerings, telcos can position themselves at the center of this high-growth, high-value market.
But with Super Bundling expected to grab an ever larger share of the market, telcos are warned not to delay investment or risk falling by the wayside.
“Telcos should not allow CAPEX constraints to stop them from rolling out fully-fledged super bundling services,” said the report. “They should [instead] look for software-as-a-service (SaaS) solutions.
“The technology that SaaS vendors bring to the table tends to be more sophisticated and tried and tested than anything telcos can build in-house, and far quicker to deploy,” said Omdia in a nod to the giant strides already made by industry leaders such as Bango, technology is already used by telcos including Verizon and Optus.
By plugging into Bango’s Super Bundling network, subscription providers get instant access to millions of potential customers — for the cost of one easy integration — and instant visibility to all of the telco’s customers.
Click here to download your copy of Super Bundling: What telco leadership needs to know about securing a wider role in the subscriptions market.
You can find out more about Bango Super Bundling here.