The Bundling Mirage: Why the Future of Streaming Isn’t All About Direct-to-Consumer

Let’s start with this: Omdia is a top-tier research firm, and I respect their work. They’ve been on point with their latest analysis on streaming trends, and their findings about the rise of bundling are insightful. If you haven’t already, check out their latest on how operator-led bundling is reshaping the global subscription video market and how telco partnerships are expected to generate 540 million subscriptions by 2029, accounting for 25% of the market. The takeaway? Bundling is here to stay. But, as always, there’s more to the story.

You can read more about our thoughts on this shift in our own article, “The Rise of Indirect Channels: How Banks and Telcos are Reshaping the Subscription Economy”. It’s no secret that indirect channels are becoming the backbone of growth for many streamers, helping them scale quickly without burning through marketing budgets. But where Omdia and I diverge is in their outlook on Direct-to-Consumer (DTC).

Omdia argues, “In the context of a global SVOD subscriptions market exceeding 2 billion by that year, telco bundling will remain a complementary distribution channel for streaming. It is unlikely ever to replace or overtake D2C as the primary method of acquiring new customers for streaming services.”

Here’s the thing—this outlook hinges on the assumption that direct-to-consumer means what most people think it means. It doesn’t. The term “direct-to-consumer” gets thrown around loosely in this industry, and I hate to break it to you, but most streaming subscriptions aren’t DTC at all.

The Three Subscription Buckets we Should be Paying Attention to

At The Streaming Wars, we recently discussed how the industry should (but won’t) categorize video subscriptions into three clear buckets: Wholesale, Third-Party Direct, and Pure DTC. 

For more context, check out our article, “The Streaming Industry’s Kansas City Shuffle.” These three categories help make sense of the numbers most companies would prefer you not scrutinize too closely.

1. Wholesale Subscribers

These customers get their streaming services bundled with other products—think services like Starz or BritBox offered through platforms such as Amazon Channels, cable providers, or mobile operators. The media company might count them as subscribers, but it doesn’t control the customer relationship. Billing, user experience, and data all belong to the distributor. 

2. Third-Party Direct Subscribers

Next, you have what looks like DTC but isn’t. These subscribers sign up through standalone apps, like Acorn TV or Starz, but use platforms like Apple Pay, Roku Pay, or Google Play for the transaction. As Kirby Grines, founder of The Streaming Wars, puts it on a recent call, “Most people think that if someone signs up to Acorn TV via the Acorn TV app, they’re a DTC subscriber. They’re not.” These transactions are handled by third-party billing systems, meaning the media company shares a cut of the revenue (up to 30%) and control of the customer data.

3. Pure Direct-to-Consumer Subscribers

Finally, we have pure DTC subscribers. Such subscribers sign up directly through the streamer’s website or app, where the media company controls everything: the payment, the user experience, and the data. This is the ideal model because it gives the company full control over the relationship. 

So Why Does This Matter?

By no means is this a call out to Omdia. In fact, the issue is industry-wide—even insiders and analysts get this wrong. Companies throw around DTC subscriber numbers like confetti, but they fail to admit how many of those subs are coming through third-party billing platforms or wholesale bundles. And the gap between perception and reality is only getting wider. Honestly, I know a couple of CEOs at media companies who couldn’t tell you the difference. 

I may work for, or may not have worked at all for, a streaming video service. But let me tell you, direct-to-consumer is a wonderful model in theory, but it’s difficult and expensive to scale in practice. Yes, you want that direct relationship with the customer. Yes, you want the data. However, the cost of acquiring DTC subscribers is astronomical, so most companies are leaning toward bundling and third-party channels. This is why a company I’ve worked closely with had 70% of their OTT subscribers attributed to the Amazon Channels program. Acquisition costs through indirect channels are often far cheaper than going direct, with the platform tax acting as a cost of sale rather than a marketing cost.

So, while Omdia suggests that bundling will remain “complementary” to DTC, the data says otherwise. We’ve been speaking to folks on the frontlines at media companies who are frustrated with the platform tax from Apple, Google, Roku, Amazon, the list goes on. These execs are paying close attention to the Epic Games lawsuits, hoping relief might be on the horizon. But until then, bundling and third-party platforms have become the primary method of subscriber acquisition, not just a complement to DTC.

The Bundling Boom: What Comes Next?

It’s hard not to love bundling when it’s done right. Telcos, broadband providers, and even banks are reshaping the subscription economy by bundling multiple services into one package. You get your Disney+, your Max, and maybe even your Uber One subscription—all on a single bill, with discounts and perks baked in. It’s a no-brainer for consumers dealing with subscription fatigue.

Bundling is one of the few strategies keeping subscribers from jumping ship to piracy. Offer better value, centralize payments, and streamline the user experience, and suddenly, it’s easier to keep customers locked in. And guess what? The rise of indirect channels is only accelerating. Platforms like Visa and Mastercard are getting into the game, helping users consolidate and manage their subscriptions in banking apps. That’s where the future is headed

And for streamers, this isn’t a bad thing. Indirect channels are a win if they can keep customer churn low. It’s not DTC, but it’s still bringing in revenue that’s easier and cheaper to acquire than going it alone.

What’s old again is new.

What We’re Watching: Stay Tuned for New Data

At The Streaming Wars, we’ve got upcoming data to shed light on the true breakdown of streaming subscriptions—how much of the market is DTC versus tied up in wholesale and third-party channels. The data will clarify just how fragmented the industry’s approach to direct-to-consumer is.

It’s time the industry gets honest about what direct-to-consumer really means. Because the truth is, most of those “DTC” numbers you’re hearing about? They’re as fuzzy as my own identity.