Paramount+ Teams Up With Walmart, Bundles Make Scoring The Streaming Wars Even Harder

1. Paramount+ Teams Up With Walmart

So Paramount+’s ears must have been burning last week when we urged Hollywood to let go of its negative perceptions of both Walmart and bundling offers, as they have indeed agreed to a deal with Walmart+ that will give Walmart+ subscribers free access to Paramount+’s ad-supported Essential plan. That’s a $5/month perk for subscribers ($4.99 to be exact) who currently pay Walmart $12.95 for the + service, which makes it even more of a +. It’s also a + for Paramount, as they pick up more viewers for their ad-supported service and for Walmart in their attempt to catch up to Amazon.

Why It Matters

Paramount is actually a great fit for Walmart+, as its programming is more mainstream than many of its competitors who are still intent on becoming another flavor of HBO. With shows like the rebooted Beavis and Butthead, Paramount+ is in a good position to capture that mainstream audience who don’t always get why Barry is funny. 

Paramount+ is also home to a treasure trove of the sort of fairly evergreen library programming people enjoy binging on, everything from MTV and VH1 hits of the 80s and 90s to Nickelodeon’s Millennial nostalgia fare from the 90s and 00s. 

So there’s that, and the fact that the other Walmart freebie is Spotify, a well-liked brand whose presence creates a nice halo effect for Paramount+.

But that’s not the main reason this deal makes so much sense.

That reason is it gives Walmart+ an opening to have The Great Rebundling of other people’s services be their thing.

Yes, Amazon has a channel store and all that, but talk to people not in the industry and no one understands what Prime video is all about and where the channel store fits in.

Meaning that just about everyone who subscribes to Prime does so for the free two-day delivery and not for the video programming. Which is often very good, but never actually seems like a perk.

You see the problem is that Amazon has all this TVOD (transactional video on demand) mixed in with the “included with Prime” programming. Plus the “free but with ads” programming from Freevee. And no one really seems to get why one piece of it is free and one isn’t and why sometimes an old series from the 90s is $1.99/episode while another series from that era winds up being included with Prime.

Point being, few consumers see video as a key selling point for Prime. Whereas Walmart has a chance to convince them that free Paramount+ and free Spotify+ are indeed tangible benefits to be gained by subscribing to Walmart+ and more or less reduce the cost of the service to nil.

Even less than nil if other services hop on Walmart’s bandwagon.

What You Need To Do About It

If you are Paramount+, well done. Not only does this allow you to expand your subscriber base while building word of mouth around your new shows, it allows you to greatly expand your advertising base too, especially for streaming, where you can offer ad-supported Paramount+ along with Pluto TV, CBS News and more. That’s a big win right there as scale is going to be increasingly important in streaming.

If you are Walmart, also well done. Creating a streaming bundle of known services whose value consumers can understand is a big win and gives you a real point of differentiation.

If you’re an ad tech vendor, helping Walmart and Paramount figure out how to combine ad viewing data with follow-up promotions on the website will be some next level stuff and should help prove the ads’ effectiveness for goods and services sold via Walmart+.

2. Bundles Make Scoring The Streaming Wars Even Harder

Last week we talked about how Disney+’s win over Netflix deserved an asterisk because it relied on some 50 million Hotstar subscribers in India, most of whom were paying less than a dollar a month.

Today we’re going to focus on a story from Puck’s Julia Alexander that Disney has been triple-dipping on subscribers.

It seems, Alexander reports, that when consumers subscribe to Disney’s ESPN/Hulu/Disney+ bundle, they are counted three times, rather than just once.

On the one hand, that is fair in that they are subscribing to all three services. On the other, it seems asterisk-worthy in that it’s unclear which of the three services the viewer is subscribing to, given that the pricing is such that it’s sort of a “buy two get one free” deal, meaning you’d still come out ahead if you only use two of the services and completely ignore the third.

Why It Matters

Streaming Wars scorekeepers have been unduly focused on subscriber numbers as their KPI and bundling is going to make that much, much harder. 

Meaning that when we start seeing bundles that combine two or more unrelated streaming services, it will be tricky to determine who gets credit for the subscriber.

Which is why we’ve been urging a different metric.

Time spent viewing.

Time spent is far more critical for all those ad-supported services. They get little value from subscribers who are just there to watch one series per week and only see four or five ads in that hour.

That is why we predicted, in our new FASTs Are The New Cable Report, that all of the major ad-supported SVOD services will soon be joining Paramount+, Peacock and Discovery+ in rolling out linear channels for their library content: linear channels increase time spent.

Add to that the fact that time spent is an easily measured metric (well once you decide on a measurement standard, anyway) versus subscriber numbers where the whole bundling thing makes counting a little dodgy.

So there’s that too.

What You Need To Do About It

If you’re Wall Street or one of the many publications—trade and otherwise—that love to score the Streaming Wars, follow our advice and shift your focus to Time Spent. Subscriber numbers are valuable until they’re not and both bundling and international pricing are going to make any sort of apples-to-apples comparison all but impossible.

If you’re a streaming service and you’re running ads, ditto on the time spent metric and get your PR teams to reinforce that. No one is paying you for ads no one sees and the more time viewers spend on your platform the more ads they see.

As noted above, linear channels help to increase time spent, so if you don’t have plans for linear channels in the pipeline right now, get cracking.

And finally, be open to bundling opportunities—consumers really like them and given that your goal right now is to increase the size of your subscriber and advertising bases, this is not the time to play hard to get.