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3 Streaming Stocks Capitalizing on Rising Demand for Bundling

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As the streaming landscape continues to evolve, strategic partnerships and bundled offerings represent a concerted effort by companies like Comcast (CMCSA - Free Report) , Amazon (AMZN - Free Report) and Warner Bros. Discovery (WBD - Free Report) , among others, to streamline consumer options, retain subscribers and achieve profitability in an increasingly saturated market.

With the average U.S. consumer subscribing to four streaming services and spending around $61 per month, according to Deloitte's Digital Media Trends report, retaining loyal subscribers has become a challenge.

Apple (AAPL - Free Report) , for instance, has been offering Apple One since late 2020. It combines Apple TV+ with other services like Apple Music and Apple Arcade. Disney, which has also been offering a bundle with Disney+, Hulu, and ESPN+, officially began its domestic rollout of a one-app experience late last year that incorporates Hulu content via Disney+ — a similar play to Paramount's Showtime combination as well as the integration of HBO Max and Discovery+, both of which merged their respective services last year.

While the concept of bundling is not new, the partnership between competing media companies is gaining traction. Bundling multiple services into a single offering aims to provide a more convenient and cost-effective solution for users.

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Comcast to Offer Apple TV, Netflix, Peacock in a Bundle

Recently, Comcast announced the upcoming launch of a new bundled offering called StreamSaver. This bundle will combine the company's own Peacock platform with popular services like Netflix (NFLX - Free Report) and Apple TV+. Comcast’s forthcoming package is an effort to reduce cancellation rates and provide a more efficient means of subscriber acquisition as the traditional cable TV business continues to deteriorate.

The StreamSaver package will be available later this month exclusively for Comcast's broadband Internet customers, ahead of another price hike for the standalone Peacock service, which goes into effect for new customers starting Jul 18 prior to the 2024 Paris Summer Olympic Games. Beginning in mid-July, the price for Peacock Premium (with ads) will increase by $2 to $7.99 per month and that for Peacock Premium Plus (mostly ad-free) will go up by $2 to $13.99 per month.

This strategic move comes amid growing pressure on media companies to scale their streaming services and achieve profitability in an increasingly competitive market dominated by tech giants like Amazon and Alphabet-owned YouTube, among others.

The Zacks Consensus Estimate for CMCSA's 2024 revenues is pegged at $123.16 billion, indicating 1.3% year-over-year growth. The consensus mark for earnings is pegged at $4.21 per share, indicating 5.8% year-over-year growth.

Warner Bros. & Disney Bundle: A New Streaming Strategy?

Seeking further scale in the streaming business, Warner Bros. Discovery announced a collaboration with Disney Entertainment for a new streaming bundle that would combine Disney+ and Disney’s Hulu with Warner Bros.’ Max, which includes an array of programming from the studio and its premium service, HBO. The new bundle will be available for purchase on any of the three streaming platform’s websites and offered as both an ad-supported and ad-free plan.

The easiest way to boost revenues is to raise prices, but it comes with the risk of more people cancelling their subscriptions. The lowest-priced Max plan is currently $9.99 a month with advertisements. Disney+ with Hulu is also offered with ads for $9.99 a month.

Among other things, the collaborative effort is likely to put the two major comic-book rivals, Disney’s Marvel and Warner Bros.’ DC, together in a cooperative venture, beginning this summer in the United States. Disney+ has more than 100 million subscribers, while Hulu reaches another 50 million. Including the linear version of HBO, Max reaches more than 97 million homes.

Earlier this year, Warner Bros. announced a sports streaming partnership with Disney's ESPN and Fox, set to debut later this fall. In December, this Zacks Rank #3 (Hold) company partnered with Netflix on a $10 ad-supported bundle offered through Verizon.

The Zacks Consensus Estimate for WBD's 2024 revenues is pegged at $41.36 billion, indicating 0.11% year-over-year growth. The consensus mark for earnings is pegged at a loss of 34 cents per share, indicating 73.4% year-over-year growth.

Amazon’s Aggressive Stance

Amazon continues to explore ways to bolster its Prime program on the back of its streaming service, Prime Video. Recently, India-based pay TV provider Tata Play collaborated with Amazon Prime Video to offer a range of packages with access to Prime Video’s content to Tata Play DTH and Tata Play Binge customers.

This Zacks Rank #2 (Buy) company has announced 69 titles on Amazon Prime Video for 2024, including movies, shows, and original content. Some of the highly anticipated shows and movies include Panchayat Season 3 and The Boys Season 4, both being Amazon Original series, scheduled for release on May 26 and Jun 13, respectively. The company is planning to release the second season of The Silent Service – The Battle of Tokyo Bay and a live-action drama adaptation of OSHI NO KO globally in winter 2024. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Amazon Fire TV is closely linked to AMZN's services, mainly promoting its own content and boasting a strong voice command system. It has expanded its sports selection and added customization features to Fire TV Channels, the platform's section for free ad-supported content.

The Zacks Consensus Estimate for AMZN's 2024 revenues is pegged at $638.26 billion, indicating 11.04% year-over-year growth. The consensus mark for earnings is pegged at $4.54 per share, indicating 56.6% year-over-year growth.

Amazon Fire TV competes directly with Alphabet’s Google TV, which has added free channels like Tubi, Plex and Haystack News directly to the Live tab. Google TV offers new free channels that users can watch without downloading or opening separate apps.

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