Two Successful Bundling Strategies: Disney vs. NYT
The New York Times and Disney are thriving with very different bundling strategies.
If you’re a long-time subscriber, you may remember a post back in the day where I interviewed Coda CEO and bundle-master Shishir Mehrotra.
For a primer on what makes an effective bundle, check out that post.
Today’s post is much shorter, and offers a simple framework to use bundling to drive revenue growth. Let’s get to it.
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As far as I can tell, there are two levers to pull when using bundling to grow revenue:
On one end, there’s product. Adding more products to your bundle should make it more attractive to more people.
On the other, there’s price. Simply put, you can use pricing to make your bundle a better value over time.
Taking each of these to the extreme creates the Bundle Strategy Spectrum. On one end, you can keep your price fixed over time, and add new products to your bundle. On the other, you can keep your products fixed over time, and use pricing to grow revenue from customers.
Two of the biggest players in media are pursuing strategies on opposite ends of this spectrum:
On one end, you have The New York Times, which has held its bundle price constant while adding new products (The Wirecutter, The Athletic).
On the other, you have Disney, which has held its bundle products constant, but has continuously raised the price of its individual subscriptions to make its bundle look more appealing over time:
Both companies are enjoying success with their respective strategies:
The NYT recently announced it has 1m+ bundle subscribers, and has found these subscribers churn at a 40% lower rate than single-product subscribers.
Disney passed Netflix in total subscribers in August.
Of course, there’s plenty of room in the middle. For example, Amazon’s Prime bundle has both added new products and changed prices over the last decade. Disney and NYT will likely end up in the middle too.
But broadly, when thinking about using a bundle to grow revenue, it may help to think about which end of this spectrum is more natural to your product.
For more on bundling strategy, check out my interview with Coda CEO, Shishir Mehrotra:
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