Are Apple & Paramount Teaming Up? Potential Bundle Deal Could Shake Up Streaming Wars

Apple Inc. AAPL and Paramount Global PARA are reportedly exploring combining their streaming services at a reduced price. 

The development move represents a new collaboration effort by competing entertainment behemoths aiming to enhance the affordability and appeal of their products, according to a news report by The Wall Street Journal.

The report added that the firms are considering a bundled offering of Paramount+ and Apple TV+ at a price lower than separate subscriptions, citing sources familiar with the talks. 

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These early-stage discussions leave the potential bundle's structure undefined.

In October, both Apple TV+ and Paramount+ experienced a churn rate—referring to customer turnover—of over 7%, which is higher than the streaming industry's average of 5.7%, as reported by Antenna data, which the news agency notes.

Apple provides Apple TV+ in an entertainment package, Apple One, which also includes Apple Music and Apple Arcade. 

This bundle records a significantly lower churn rate compared to Apple TV+ as a standalone service, the report adds.

Previously, Paramount offered a bundled deal combining Paramount+ with Showtime, but this year, the company merged them into a single Paramount+ service, The Wall Street Journal report reads. 

Alongside this change, the price of its ad-free tier increased to $11.99 from $9.99. In a similar move, Apple increased the U.S. price of Apple TV+ to $9.99 from $6.99 in October.

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Paramount has actively pursued bundling strategies for its streaming service. 

Its ad-supported Paramount+ is offered free to subscribers of Walmart Inc.'s WMT $98-a-year customer deals program. 

Additionally, Paramount has agreements with Delta Air Lines, providing SkyMiles frequent-flier members complimentary access to the streaming service, along with free Wi-Fi on flights, according to the report.

Apple and Paramount's negotiations occur amid widespread competitive challenges faced by major players in the entertainment industry.

The bundling of streaming services is occurring "faster than we thought," said Erin McPherson, senior vice president and chief content officer at Verizon Communications Inc. VZ, told The Wall Street Journal. "It's clear that bundles are here to stay." 

Further, such collaborations are anticipated, as evidenced by Warner Bros. Discovery, Inc. WBD CEO David Zaslav expressing openness to bundling their streaming service, Max, with other platforms.

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Price Action: PARA shares are trading higher by 4.31% to $14.99 premarket on the last check Friday; AAPL shares are trading lower by 0.21% to $189.56.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.