“There’s only two ways I know of to make money: Bundling and unbundling."

That quote was uttered by Jim Barksdale, then CEO of Netscape just before the company launched one of the most successful IPOs of all time and ushered in the first dot com boom.

It's a quote that remains part of Silicon Valley lore, as relevant now as it was then.

In the 1980s and 1990s, cable television built a bundle that would become a dominant force in the U.S. media industry, at its peak drawing more than $100 billion of revenue per quarter in North America.

Three decades and hundreds of unwatched channels later, that clunky television bundle is falling apart, frayed by standalone streaming services including Netflix, Hulu and Amazon Video. Even old-line broadcasters like CBS and NBC began offering streaming services to keep up. A Pew Research report from December found that one in seven Americans is now a cord cutter.

Freed from the big, bad bundle, cord cutters can now choose from a quickly-escalating number of services. Of course, they have to sign up for each of them. And pay far more per service than they do for similar TV channels. Then there's the hassle of figuring out if what you want to watch is on one of the services you pay for.

Those are the kind of challenges that Jake Counselbaum, 24, the founder of a digital marketing agency in Chicago, said he didn't feel like dealing with. Counselbaum said he'll cut the cord eventually, but hopes to be able to replace cable with a similar bundle.

"I like a bundle only because even with Comcast you'll be searching for a movie and you'll stumble upon some random channel that has a great flick," he said. "I would hate to lose that if I have three streaming services, but I don't have the other six that bundle in."

Rebundling

John Hendricks understands that kind of hassle.

In the 1980s, Hendricks founded the Discovery Channel and helped build the cable bundle. He knows standalone streaming doesn't achieve the same thing — and that it's getting pricey to subscribe to a gaggle of different services.

“It's more expensive right now. That's the challenge,” Hendricks said in an interview with Mashable.

His new company, CuriosityStream, features non-fiction and documentary-style video and is just one of the many streaming services bidding for the subscription dollars of cord cutters.

But with new services launched on a seemingly daily basis, questions have emerged about whether consumers will really want to pay for so many different options. At $2.99 per month, CuriosityStream is far more expensive than all but the most expensive cable channel, ESPN.

So this January while at the Consumer Electronics Show in Las Vegas, he met with some of the biggest online content distributors to talk about what a streaming bundle might look like.

“We're initiating discussions with major distributors of content about offering [subscription video on demand] services to their customers at a bundled rate that is much lower,” Hendricks said.

Amazon and Google to the rescue

Amazon is the leading candidate to offer the first streaming bundle, having started to offer outside video services through its Prime membership. Those don't come at a discount — yet.

It's just a matter of time, it seems. As venture capitalist Fred Wilson recently wrote, "we are now witnessing the re-emergence of the entertainment bundle in the over the top world."

But it's not just video bundles that are coming.

Amazon Prime is the leader of a new kind of bundle, wrapping up things like delivery service, music and video. Google is also experimenting with this concept through YouTube Red, which now offers a music service along with the site's vast video library and new original content.

Paul Verna, senior analyst for eMarketer, said that for a market to emerge that can be more diverse than just giants like Netflix and Hulu, prices will have to come down.

“The more of these subscriptions services that are out there, the harder it is for any of them to rise above the noise,” Verna said. “So when people look at that option to cut the cord, a lot of times once they start figuring out exactly what they want for content, they find that they're not necessarily really saving a lot or any money.”

Bundling and unbundling

Image: Pew Research CEnter

The economics behind the bundle are relatively simple. Services that operate on their own stand to incur major marketing and distribution costs that require them to charge higher prices. Bundled services can spread those costs out or transfer them entirely to distributors while accessing a larger customer base, lowering the price considerably.

There's officially too many streaming services. I've never heard of any of these shows. — Kyle Max (@TheKyleMax) January 11, 2016

Hendricks said that it's not necessarily an either-or proposition, and that consumers could end up having various bundles to choose from as well as the a la carte option.

“I think what you'll see the industry begin to experiment with is subscription video on demand and maybe packages of those that are offered within a bundle,” Hendricks said. “So you may see four, five or six SVOD services bundled together for less money than if you purchased them individually.”

The sound of music

There's a new wrinkle to the bundle however — music.

Aviation mechanic Vincent Kingsley used to wish he could “jailbreak” his phone to avoid ads while streaming music and videos on YouTube. The interrupted music got so frustrating that the 20-year-old decided to mostly stream from Pandora. But then YouTube launched Red.

“I mainly wanted to be able to leave the app on iPhone and have music play in the background,” Kingsley, of Tulsa, Oklahoma, told Mashable. “Being able to access many types of content in one well-thought-out app is a great thing. Red takes all of that and makes it even more convenient.”

YouTube Chief Business Officer Robert Kyncl speaks at the unveiling of YouTube Red. Image: AP/Danny Moloshok

Like Kingsley, many consumers are drawn to the convenience of ad-free bundles that include both videos and music.

That’s why music has become key to YouTube Red’s success. Amazon has also incorporated music into its bundle, and is also reportedly working

“It's not a surprise to me to see companies that use music as a lever are doing it,” Verna said. “At the same time you have music oriented companies like Spotify that are also seeing the light on the other side and getting into video. The fact is that two types of media are inseparable.”

At the Consumer Electronic Show earlier this month, YouTube’s Chief Business Officer Robert Kyncl also emphasized how critical music is to the platform.

“Now, launching a subscription service may not seem like a big deal,” he said during his keynote. “These days everybody is launching a video service, everybody is launching a music streaming service. But we are doing both in one.”

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