Apple, Disney Take Baby Steps Toward The Great Rebundling

Well, that didn't take long. Apple and Disney have both announced bundle deals in the past few days with partners new and old, and leaks out of Cupertino suggest more is to come soon.

Both services just launched in November, to varying welcomes, and have struggled to launch enough new originals to sate a pandemic-saddled populace bored with the same old shows. The bundles are one way to offer bargains and access to new programming that will keep consumers from clicking "cancel" and moving on.

The latest announcements aren't quite what deeply esteemed colleague Alan Wolk calls the Great Rebundling, but we're definitely seeing the smaller services partnering up for protection and market pertinence.

Soon enough, even their big competitors will have to consider who to dance with, as customer churn keeps rising and new show production remains hamstrung. But the new announcements are important baby steps in the direction of further tie-ups and bargain offerings.

Apple announced it'll bundle up ViacomCBS' two streaming subscription services, CBS All Access and Showtime, for $9.99 a month. That's a nifty 52-percent savings on those ViacomCBS services, which respectively go for $9.99 and $10.99 a month separately.

That brings cheap and easy access to fan favorites such as a raft of Star Trek original series, The Good Fight, Ray Donovan,and Billions, all for something like a bargain, or at least a competitive price.

It's easy to see that particular bundle as a move by three nice smaller services trying to add heft and curb appeal amid the increasingly churn-filled market now overstuffed with encyclopedic mega sites.

And those of us who think Apple TV+ would benefit by having an actual library of older shows to go with the small selection of pretty good originals that it's been rolling out are wondering if this deal also might signal a much larger tie-up that could benefit both sides.

With multiplex and cable-TV pioneer Sumner Redstone finally gone to that Great Bundle in the Sky, it's possible that daughter Shari, who controls ViacomCBS, might be open to conversations about her mid-sized media company's future. For now, ViacomCBS still looks too small to fully compete with the market power and reach of Netflix, AT&T, Comcast, Amazon and Disney (never mind Apple itself) as we more fully move into the streaming future.

Yes, CEO Bob Bakish just said the company will launch an international "superservice" early next year that includes material from All Access, Showtime, Paramount and other corners of the ViacomCBS empire. And yes, he's typically used international markets as test runs for his domestic strategies, so perhaps that's the template for a future combination of Showtime and All Access in the U.S.

But that doesn't fix the girth challenges Showtime and CBS All Access face domestically right now, even with the recent addition of 70 library shows to the All Access holdings. As separate services in every way, they're not well set up for optimal competition against services with much richer owners.

Leaks from Apple HQ suggest it's in a bundling mood across all of its software services. The leaks suggest the company will announce, perhaps as soon as next month, various bargain combinations of Apple Music, TV+, iCloud, Arcade, and News+, and the likely launch of a fitness service to take on those from Peloton, Lululemon and others.

Consider those bundles a stretch goal after the company hit its announced plan to generate $50 billion per year in "services" revenue. During the most recent quarterly earnings, the company said it generated more than $13 billion in services, and another $6 billion in wearables such as its Watch and AirPods.

Never mind all those iPhones, iPads and Macs, more than $19 billion in sales during a quarantined quarter is a mammoth business all on its own. The only question for Apple's push here is whether the new antitrust lawsuit from Epic Games challenging its App Store policies ends up damaging the company irrevocably in the eyes of hundreds of millions of Fortnite players.

Bundle fever is starting to take hold as well at Disney, owner of what I'll cheerfully call the world's largest niche service, Disney+. That service was already available free to Verizon customers. Now, Disney will add its other two services, ESPN+ and Hulu, to VZ's free pile o' goodies.

Normally, the three services cost $12.99/month as a bundle, a buck less than the most common Netflix subscription fee. Separately, they cost just shy of $24 a month

The timing of the Verizon announcement is propitious. Apple is weeks away from announcing a much-awaited next generation of iPhones, including several models expected to have 5G capabilities.

High-quality video experiences are one of 5G's major attractions, especially for in-home wireless devices that could replace wired broadband.

This feels like a bigger win for Verizon, coming as it does right before the iPhone's arrival this fall. Imagine the appeal: buy an iPhone, get Apple TV+ for free for a year. Do it through Verizon and get the Disney bundle for free too. Add in CBS All Access and Showtime for $10, more a month and you have a lot of name-brand video for not very much at all. Who needs cable?

But it's also an opportunity for Disney to further build up public awareness of its in-house bundle, even as it continues to operate three separate services, with very different sensibilities, three log-ins, billing, and the rest. So, baby steps, baby steps.