The great re-bundling is set to begin, and it’s about damn time

By the end of the year, sports fans without a pay TV subscription would, in theory, need to subscribe to nine separate streaming services to watch every major sporting event in the United States.

That’s right, nine streamers: ESPN, Fox One (Fox’s upcoming streaming sports service), Paramount+, Peacock, Netflix, Prime Video, Apple TV+, the future TNT Sports streamer (currently on HBO Max), and wherever Versant, NBC’s forthcoming spinoff, decides to put its sports properties. Add in a regional sports network subscription, and you’re up to ten.

When sports fans say streaming is becoming just as expensive as the old cable bundle, they’re not exaggerating.

Of course, no one in their right mind is going to subscribe to nine or ten separate streaming services to watch all the sports they want. At a certain point, a traditional or virtual pay-TV bundle, such as Comcast, DirecTV, or YouTube TV, would become significantly more cost-effective.

But, the sheer absurdity of needing 1o separate streaming services to access everything you used to get for one simple monthly price demonstrates just how excessive sports fragmentation has become.

However, we are beginning to see early signs of the long-awaited “re-bundling.” On Monday, Fox and ESPN announced that they will bundle their respective streaming services together, beginning in October, recreating two-thirds of the doomed Venu Sports joint venture that died on the vine after Fubo filed an antitrust lawsuit.

Antitrust concerns lie at the heart of the re-bundling debate. Whether federal regulators will allow media companies to combine and sell offerings directly to consumers remains a major legal question. But honestly, is there any other way to fix this mess?

Even setting aside the price for a moment, the current reality is far from consumer-friendly. Sports fans who would rather watch games through streaming services rather than a pay TV bundle are forced to download any number of apps to view the content they paid for. That alone creates friction.

Say it’s early afternoon on a Sunday during NFL season, and you’d like to keep an eye on both the CBS game and the Fox game. Instead of simply flipping a channel, which takes seconds, fans must close one app and launch another just to switch games, which can take a minute or more. Already, regardless of price, there’s a market for a platform that integrates these streamers for a seamless experience.

Of course, when considering price, the proposition to allow bundling becomes even greater. Already, bundling ESPN and Fox One will save consumers $10 per month off the a la carte price. Those savings will presumably increase as more companies are added to the bundle. A larger offering, including more media companies and content, mitigates churn, allowing companies to offer a more competitive price. It’s partly how the cable bundle survived (and thrived) for decades. Nobody was going to cut off access to all of their television entertainment at once.

The fear from regulators is that a bundle formed directly between media companies without a distributor like Comcast or DirecTV serving as an intermediary would spur anticompetitive practices. One could imagine that a hypothetical bundle featuring all nine or ten sports streaming services could begin charging outrageous prices if such an offering reached a critical mass of users. If this bundle were the only platform to get all of your sports in one place, it could begin to charge whatever it wanted.

Bundling could also dampen bidding wars for sports rights. Why outbid a rival if winning rights still boosts subscriptions to a shared bundle you both benefit from? These are serious, legitimate antitrust concerns.

But that’s all under the assumption that such a bundle would, in fact, reach a critical mass of subscribers. That logic, the same logic that persisted throughout legal decisions during the Venu Sports debacle, is flawed, especially now that each major media company boasts its own individual streaming service. Consumers now have a choice. They can mix and match à la carte offerings based on the content they want to watch, or they can choose a bundle.

When Venu Sports was announced, ESPN’s standalone streaming service was still shrouded in mystery, with no exact timetable or details about the product having been announced. Fox had yet to announce a standalone streaming service at all. At the time of Venu, there was a legitimate argument that, if Venu was the only way to buy ESPN or Fox direct-to-consumer, it could lead to anticompetitive practices. That type of offering would’ve certainly hurt cable and satellite distributors, which, at the time, were unable to offer sports-specific “skinny bundles.” Now, as ESPN and Fox prepare to launch separate standalone streamers next week, and distributors are able to sell genre-specific packages, both points are moot.

ESPN or Fox would rather have someone subscribe to its standalone streaming service than a bundle. That subscriber is going to pay a higher monthly fee than an individual subscribed to a bundle, and they’ll also be interfacing with the network’s content in a way that allows for more personalization, hence higher ad rates and longer time spent on platform. That’s partly why, even if someone pays for the ESPN and Fox One bundle, they’ll still have to launch each individual app to access the content, rather than having one integrated into the other.

In other words, ESPN and Fox will still be competitors despite offering a bundle that includes both of their streaming services. The same can be said for hypothetical future bundles that include more sports broadcasters.

Since Venu earlier this year, ESPN and Fox have taken measures to avoid the same regulatory scrutiny that killed the joint venture before it ever began. With skinny bundles now on the market, and both ESPN and Fox’s linear channels available à la carte, it’s difficult to argue that bundling isn’t a consumer-friendly proposition.

Imagine an NFL bundle where ESPN, Fox, Paramount+, Peacock, and Prime Video all come together to offer their streaming services for a single monthly price from September through February. Or an NBA bundle between ESPN, Peacock, and Prime Video during basketball season. Or a year-round bundle that included all of the sports streaming services one could need.

Every consumer has different preferences. One might want the NFL bundle. Another might want everything. No single offering will reach the type of critical mass that regulators feared with Venu. There will be options, perhaps too many options. Media companies will still compete for sports rights, allowing them to remain a viable partner within these bundles.

It’s easy to envision a tech-forward platform where users can select exactly which services they want, access them seamlessly, all in one place, and pay the lowest possible price. That might be many years away, but it can and should happen.

But first, companies have to be confident that they can bundle their offerings together without facing regulatory hurdles. Those legal challenges look far less likely now than they did one year ago, when there were legitimate reasons to fear Venu’s potential monopoly power.

With ESPN and Fox’s direct-to-consumer services finally coming to market in the matter of days, it’s only a matter of time before numerous bundles do too.