Netflix and Max Are Set To Become a $10 Bundle via Verizon

Verizon is bundling Netflix and Max, offering the ad tiers of these streaming services for a discount.

The mobile wireless company is setting its sights on a strategic offering through a combined bundle of the ad-supported tiers of Netflix and Warner Bros. Discovery’s Max at just around $10 a month, significantly less than the typical cost of about $17, according to insider sources. This initiative showcases the mounting competitive pressures faced by streaming companies in a market where user loyalty often hinges on the availability of specific shows.

Bundled offers, particularly through major distributors such as Verizon, Comcast, and tech behemoths like Apple and Amazon, present a compelling opportunity for these streaming services. By consolidating their offerings, they can attract more customers and reduce subscription cancellations or “churn.” This approach is particularly beneficial for ad-supported services, which need rapid growth to attract substantial advertiser investment.

As ad-free streaming costs continue to rise, with major platforms seeing about a 25% increase over the last year, Verizon’s discounted bundle emerges as an attractive alternative. This move also coincides with the recent launch of Netflix’s ad tier, which has started slower than expected.

This is not the first time Verizon has bundled Netflix into its offers, but it’s the first inclusion of the streaming giant’s ad-supported tier. Verizon previously launched an offer that gave customers a free year of Netflix when they subscribed to another service through its streaming marketplace. The specifics of this new revenue-sharing agreement between Netflix, Warner Bros. Discovery, and Verizon remain unknown, but according to The Wall Street Journal, “There is a minimum guarantee of revenue for the entertainment companies, the people familiar with the matter said.”

As Verizon gears up to roll out this new offering to its “myPlan” wireless customers, Warner Bros. Discovery CEO David Zaslav has expressed his belief in bundling as the future of the business, especially in the current economic and regulatory market, which “isn’t conducive to mergers.”

“And it would provide a meaningful consumer experience. If we don’t do it ourselves, I think it will be done to us.”

Warner Bros. Discovery CEO David Zaslav via The WSJ

In 2021, Warner Bros. Discovery made a notable entry into the ad-supported streaming platform with its $9.99 tier, followed closely by Netflix, which introduced a $6.99 ad tier in late 2022.

Despite the promising outlook, Netflix has reported a slower-than-anticipated start to its ad-supported tier, with executives informing investors about the initial sluggish growth. Advertisers have expressed their desire for a broader platform before increasing their spending commitments. However, Netflix recently revealed an upturn in the trend, with active monthly users of their ad-supported tier jumping to 15 million, a considerable rise from the 5 million recorded in May. As for Warner Bros. Discovery, it has yet to release specific subscriber numbers for its Max ad tier.

According to analytics firm Antenna, Netflix’s ad-supported tier made up approximately 30% of all new U.S. customer sign-ups as of September, nearly doubling its share in December. Warner Bros. Discovery’s Max saw a similar trend, with the ad-supported tier’s share of sign-ups increasing from 16% to 19% within the same time frame.

From a global perspective, Netflix commands an impressive 247 million subscribers, with 77.3 million based in the U.S. and Canada. Warner Bros. Discovery, while not providing specific subscription numbers for Max, disclosed that its direct-to-customer services, led by Max, attract a total of 95.1 million subscribers, with 52.6 million of them located in the U.S. and Canada.