Faced with vastly increasing numbers of streaming services, together with the ubiquitous presence of social media, conventional entertainment studios are considering ways to scale their streaming services to ensure their continued profitability. In particular, Disney’s ESPN, Warner Brothers, Discovery, and Fox recently announced a joint venture to launch a sports streaming service. Meanwhile, Paramount and Comcast are in talks about a potential joint streaming venture of their own.

Consolidation through such mergers and partnerships has long been a way for smaller companies to align their interests and compete more effectively with larger competitors. In the context of our discussion, the studios are seeking to compete with tech giants, like Amazon and Apple, that entered the streaming market earlier and with considerably more resources.

The sports-oriented joint venture aims to launch a direct-to-consumer streaming platform, with an accompanying mobile application. According to early reports, it will offer a wide range of sports content to consumers, all for a single subscription fee. Whether consumers will agree to the fee and adopt the platform depends powerfully on the attractiveness of the combined sports content offered, compared with specific content available on single platforms (e.g., MLBtv for baseball games, ESPNU for college sports).

The collaborating studios are betting that they will, noting available evidence that shows that audiences tend to prefer simplified subscription models, so they don’t have to keep track of dozens of individual payments. Some early consumer satisfaction surveys also indicate a sense of optimism about the wide range of content that can be achieved by bundling multiple services.Still, the joint ventures will encounter some significant challenges. In a recent lawsuit, FuboTV has alleged that the collaborative sports streaming service involving Disney, Warner Brothers, Discovery, and Fox will represent an anticompetitive practice that suppresses active, free-market participation. Therefore, FuboTV is seeking a permanent injunction to prevent the joint venture from moving forward.

Discussion Questions

1. The first joint venture announced is a sports streaming platform. Can similar joint ventures for other types of content be profitable and effective? Why or why not?
2. Why were sports the focus of the first joint platform? What about this content lends itself to bundling strategies?
3. As a consumer, do you prefer bundles or individual subscriptions? 

Sources: Alexandra Canal, “Streaming bundles: A new era has arrived,” Yahoo Finance, February 21, 2024; Khristopher J. Brooks, Anne Marie Lee, Alain Sherter, “Disney and Warner Bros. are bundling their streaming platforms,” CBS News, May 9, 2024; Mike Vorkunov, “FuboTV sues Disney, Fox, Warner Bros. and others, alleging anticompetitive practices,” The Athletic, February 20, 2024; OpenAI ChatGPT, “Assistance with Research on Streaming Bundling Strategies,” ChatGPT, May 19, 2024.