In a notable escalation of the trend to bundling streaming apps, Verizon will offer customers the ad-supported tiers of two leading, rival streamers, Netflix and Warner Bros. Discovery’s Max, at a significant discount.
The plan is to offer the two, which would normally go for a combined $17, for about $10 per month, according to the Wall Street Journal, and a subsequent Reuters report.
The companies involved, who are said to be planning to announce the deal in coming weeks, have so far declined to comment.
The financial terms are said to call for Netflix and Max to share subscription revenue with Verizon, and a minimum guarantee on revenue for the streaming services.
Bundling—including inclusion in multiple-app subscription hubs like Apple One and Verizon’s +Play — have been shown to reduce subscriber churn, which is a pivotal factor in determining the profitability that Netflix hopes to increase and streaming rivals hope to reach as soon as possible.
Verizon’s +Play app marketplace has reduced churn by a whopping 60% to 70% on average for participating apps, as well as being a “smash hit” among consumers, Verizon Consumer Group CEO Sowmyanarayan Sampath said this week at the Paley Center for Media.
Verizon already offers Max and Netflix's premium, ad-free plan, as well as other leading streamers (above) on +Play. +Play is also featuring Netflix’s premium plan in a $25 bundle with NFL Plus. But the new Max/Netflix deal would be the first to offer the Netflix with ads tier.