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Are OTT Bundles Getting Too Big?

Learn more about OTT and SVOD at Streaming Media East 2022.

Read the complete transcript of this clip:

Randy Ahn: We call it the bloated bundle. it's a pretty negative term as it is today. And so I think users have spoken. I think it's clear that they want something different. I think choice--Bassil, to your point--is really important there. And it's choice with a little bit of an influence in terms of the importance of things like personalization and machine learning and helping make the right recommendation based on what you've watched or what your interests are. I think it's a balance between those things and I think the consumer should have choice, especially when it comes to anything that's the business model in which they prefer to have their viewing experience in and have the choice to sign up for individual a la carte services or bundles.

I think that choice is really important. And then when it comes to the discovery of content, what's the role of recommendation and personalization? I think that's really critical to making a better user experience. You don't want to spend the majority of your time looking to find something to watch. Hopefully you can find it quickly, get interested in it, and start to start to consume that content and have that lean-back experience. And so I totally agree. I think we're going back. I think it's almost hand in hand with what we're seeing with just what streaming is and the growth in streaming, the rocket ship growth of streaming, and it's not headed towards a world of back to bundles and bringing in content that a user is not interested in or has not chosen to participate with.

Miguel Rodrigues: Absolutely. I think there was a time where one could think that you were at the point of the world where we could have gone that way. So imagine when Disney came along and they could have said, "Look, I'm gonna have my app. And if you want to have kids' content, you pay half the price. And if you want to have the series with the Star Wars and the Mandalorian, whatever, then you pay something else." And I think that's how it started in the cable business. If you remember, the only reason why people thought they were overpaying is because they would see how much it costs for me to have these 10 extra channels about documentaries or 10 extra channels about sports. And then, when you put in all of that and you say, "You now need to pay for all of this," they'll go, "But I think that costs 10 extra dollars. So if I don't want those channels, can I remove that from my bill?"

When OTT services started, that was never the case. So everything in every single OTT service that we saw out there, things were just included. You never had Netflix splitting their catalog and saying, you will pay an extra $5 for the extra content. That never happened. Even in Disney, they have pretty different content inside of their app and they never did that. So I think, in a sense, we could have gone back to that if there were a lot of services that would've started splitting their offers. And I think maybe having 4K and HD is the closest we got to that because people needed to make a choice. So if you then force them and say, "Now you need to have 4K," maybe I would think, "I don't have a 4K TV. Do I really need to pay for that?"

And that is, I think, something similar to the bloated bundle, but I totally agree. I don't think we went in that path and in a sense, that's amazing for the customers. It means that they can actually pick what they like to watch. And if they don't like it they'll cancel the subscription, and they don't have it again. And I think this element of choice is something that is here to stay, and it's not gonna go away. People are just gonna get used to that. It's gonna be impossible to go back to, to a different model, I think.

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