In the early days of streaming Netflix and Hulu promised an on-demand viewing experience with an ever-expanding library of movies and TV shows, providing an alternative to the traditional cable bundle.
Today, consumers are cutting the cord but also juggling streaming services, creating a fragmented and confusing experience – and perhaps creating the need for a streaming bundle.
“It certainly could happen if one person focused on one type of demographic and the other focused on another type of demographic,” John Malone, chairman of Liberty Media, told CNBC’s David Faber in an interview that aired Thursday. “A Disney+ together with Max could be a very good combination. You might also see sports-related or targeted bundles.”
Malone, known in the industry as the “cable cowboy,” sits on the board of Warner Bros. Discovery, the parent company of Max. He has previously spoken about a future of streaming bundles. But the idea has taken on increasing urgency recently as media companies try to become profitable with their direct-to-consumer offerings.
Sports streaming, as Malone noted, is an important piece of the puzzle. Streaming platforms like YouTube TV, NBCUniversal’s Peacock and Amazon Prime have made the leap and paid the price for streaming major sports like NFL Football. But exclusive deals mean certain games are shielded from those who don’t subscribe to the right streaming service.
For example, Amazon secured exclusive rights to NFL’s “Thursday Night Football” in 2021 for $1 billion per year through 2033. Last year, YouTube TV secured the rights to NFL Sunday Ticket for $2 billion per year. Those who don’t subscribe to one or both of these services may be out of luck when trying to watch games streamed under these exclusive deals.
“Broadcast continues to survive, but is under a lot of pressure as Big Tech competes for sports,” Malone told CNBC. “The anomaly is that network neutrality creates a world where Amazon can buy ‘Thursday Night Football’ for multiples of what the industry paid – effectively choking the networks and forcing the distribution companies to spend a lot of money on rapidly expanding capacity . .”
This month, Disney announced its plans to buy Comcast’s remaining one-third stake in Hulu. And next month, Disney will launch a combined app that bundles Disney+ and Hulu content. Disney already offers a three-way bundle plan of Hulu, Disney+ and ESPN+, which Disney owns.
According to Disney CEO Bob Iger, the company expects to roll out its direct-to-consumer ESPN offering, essentially the entire channel available as a streaming option, in 2025. “We clearly intend to expand ESPN on a direct-to-consumer basis,” Iger told CNBC’s Julia Boorstin on Wednesday. “We think that’s great.”
Malone also pointed to the potential for more cable streaming bundles, reflecting the resolution of Disney’s feud with Spectrum parent company Charter Communications. The companies’ agreement included ad-supported Disney+ and ESPN+ subscriptions in some Spectrum offerings.
“The streaming version with ads will be part of the cable bundle,” Malone, a former Charter board member, told CNBC. “You could buy ESPN’s stream if you want, but why pay twice for it? I would much rather see the cable companies be distributors of streaming in bundles and packages because the two are kind of joined at the hip stuck.”
Warner Bros. Discovery declined to comment. Disney did not immediately respond to CNBC’s request for comment.
Disclosure: NBCUniversal is the parent company of CNBC.