One of the most successful examples of bundling is Microsoft's enterprise plans. For instance, the top E5 plan includes so much enterprise software for so low price that it creates the perception of free software. MS Office? Free. Power BI? Free. Etc.
Tableau, which I believe is a more sophisticated data visualization application is getting squeezed out from enterprise accounts. Why? Because Power BI is "free".
Nothing in E5 is 'free', it's just included in a much more expensive license. What Microsoft has done successfully is convince people to just give up and write one big check because figuring out how to optimize spend for what you need is intentionally obtuse. Bundling is powerful, especially when used as a weapon.
Hey! Power BI is free! But we don't need it. Too bad!
Try to put together a license bundle that both doesn't include it and cost less than our E5 and we'll make you wish you hadn't.
Which is especially galling because we paid for an E3 because "it was all in there", but we found out quickly we'll, yes, the product is there, but the feature of the product you need is an up-sell license. So we pay for individual up-sells, and then get hit with "hey, why not just cave and get an E5...whether you need it all or not".
I'm sorry, but Microsoft's enterprise licensing is simply a nightmare. We're months into trying to make decisions about whether to go to E5, and we still get evasion from the Microsoft folks and the discussion quickly devolves to "just pay for the E5...it's easier". Don't even get me started on the "what of our huge investment in on-prem licenses are applicable to Azure/O365?". The Microsoft sales people just chuckle.
They are deliberately creating an information asymmetry to exploit, where none naturally exists. I really dislike these sales strategies. I mean I really, really dislike them.
How can we discourage them in the market? Is 'no sale' all we have to employ against these tactics?
I don't get the feeling you can fix this through voting with your wallet. Markets don't seem to solve these kinds of issues, on the contrary, this seems to be a negative side-effect of their core nature, that all decisions come down to profit maximization.
Maybe exerting our collective power for the public good through democracy? Some kind of new commerce regulation that would disallow bundling in general? I wonder, are there arguments that there would there be any downsides to doing that? Does anyone believe that bundling is a net positive in any sector?
Where is the consumer harm in giving a discount for buying more? Are people really complaining that Office 365 with 6TB of storage costs the same as DropBox by itself?
But actually, Ben references his prior article about the benefits of bundling
If Dropbox is a substantially better product (real or perceived), yes, the users complain bitterly (been there, done that).
If Microsoft is simply using bundling as an advantage of market share and undercutting the price of a competitor to drive them out of the market, then the consumer is harmed by the reduction of competition. Once the competitor is gone, what do you think is going to happen to the price and/or competition of that bundle? This isn't new.
If DropBox were substantially better, why wouldn’t enough people pay for it to make it a successful product? If they didn’t, the market has said it wasn’t better.
This is just hypothetical. I’m not making a judgment about DropBox.
But, in the case of DropBox, Steve Jobs said a decade ago that it was feature not a product. That is coming to pass.
I don't disagree that DropBox is a bad example. It is a feature not a product. Maybe better is PowerBI vs Tableau.
But to your point, what should be wildly obvious is that "the market" optimizes for far more than what product is "better", and that "better" (for whatever value of) is often low on the priority, whether it should be or not. It's very often the case that someone in power makes a decision along the lines of "why are we paying for Tableau when we can get this PowerBI thing which Microsoft tells me does the same thing for free". And suddenly, you're trying to learn PowerBI. You can find any number of examples where 'better' things were not what the market picked to survive.
Then you have Slack. People hate Teams so much that there are MS shops that get Teams for free and still pay for it.
Heck, Amazon has it own messaging platform - Chime. I can only assume that after much complaining, even internally we are migrating to Slack. There are plenty of public announcements about “partnerships”.
The best hope is that when the bundler inevitably takes their eyes off quality and features of the individual products and a new entrant can eat their lunch.
Heck even Office 365 for personal use is amazing. It’s the same price as DropBox and you get up to 6TB (1TB per person but you can combine it) of storage for the same price plus everything else for up to six people.
I dislike this fact so much! You're correct of course, and this is the only reason I pay for a personal/family plan. I have no issues using LibreOffice myself (and anyone with whom i corresppond has no clue that I'm not using MS Office); but my partner and offspring have needs. My partner simply prefers office 365, and my offspring uses the school's web version for most work, so it is mostly out of convenience (and sometimes has to submit homework specific via MS Office)... Also honestly, the sheer amount of online storage PLUS the inclusion of the office 365 apps vs , say, dropbox is too compelling a deal to pass up.
As a side note, i dislike how schools tend to push students to learn Office (e.g. Word) sp specifically...I feel as though generations of children are being taught only how to drive a Ford Escort car, but will be confused the day that they have to use, say a Honda Civic, or heaven forbid a non-automatic automobile. As a tangent to this, while the following has never come up when I've interviewed job applicants for my teams...but if all things were roughly equal with candidates, and the only difference between candidates is that one only knows how to use Windows and Office, and the other one knows how to use Windows, and Mac, and Linux (or at least LibreOffice or other office suites, or some combination thereof)...I'll be picking the person who was able to use/learn more than just Windows/Office! </steps down from soapbox>
Office has been the standard since at least 95. I don’t see anything replacing it in the next decade. Google attempted and is doing a pretty good job in education, but overall, it’s still not getting buy in from corporate America.
For most things, appointment media is going back to where it was prior to the 20th Century: Live performances, including sports, where seeing it with a crowd is part of the appeal. Scheduling your day to catch a program, be it "Fibber McGee and Molly" or "Leave It To Beaver" or "Cheers" or "Friends", will seem as bizarre to someone in 2050 as it might have to someone in 1850.
YouTube does occasional appointment media. Early in the pandemic, they did a global showing of Yellow Submarine that required watching at a specific time on a Saturday. It was my kids' introduction to the movie.
Not generously. It was very much a thing in the 80s and most of the channels of the 80s are still strong although there is the ineluctable transition of all basic cables towards showing nothing but Law and Order reruns.
An actual conversation with my son a few years ago:
Son: Dad you said you've never lied to me...
Me: I don't believe I have.
Son: You told me you loved Looney Tunes when you were my age, but you also told me that YouTube didn't exist when you were my age. So how could you have loved Looney Tunes when you were my age?
All true. I should add he is on the high functioning end of the autism spectrum, but still I remember my shock when I found out that my mum had to watch TV in black and white...
The screen is the thing. Broadcast TV to CRT displays was never important; the human eye and ear glued to a glowing rectangle of changing light and sound, that was the thing. Now, the screens are everywhere, on the wall, in our pockets, and can show us anything anytime. It has revolutionized entertainment to the point where each individual can mine his or her own seem of addictive content that shuts off the critical mind, to provide respite from an unfriendly world occupied by humans zombified as they descend into the mindless void of the screenhole.
So, yes, the economics of it is fascinating, and horrifying, as billion dollar companies exist to create the artificial scarcity information requires to monetize. But the side effect should always take center stage: we relegate each other and ourselves to staring into the glowing abyss in our pockets, each compulsive viewing rightly characterized as a suicide in miniature.
Broadcast vs on-demand is crucial. There’s a huge difference between having a captive audience that has no choice and producing content people choose to consume.
I think that's less of a huge difference when a small number of platforms dominate online media and aggressively use algorithms to determine or strongly influence what content people see. Yes, you can still absolutely find beautiful niche content on YouTube, and I value that a ton, but YouTube still has immense control over people's viewing in aggregate. It's a little bit like traditional broadcast TV if there were a billion channels but after every 3 minutes of viewing the TV chose which channel to flip you to unless you were constantly diligent about manually choosing what you want to watch.
Crucial to what? To making content "better", meaning more potent, more addictive, more alluring than real life?
I'd argue that broadcast TV was an okay middle ground, because if you were addicted you were a couch potato. Now, we are all couch potatoes but without the couch, and without the social opprobrium, or even the opposite!, the world is a generally worse place. I mean, I love 3blue1brown, but is he worth the societal cost?
I mean, Plato did always complain that writing makes people stupid and kids these days are ruining society because they can’t speak well or remember anything.
And I think books were ruining kids these days in the 1600’s
In 1800’s it was populist flashy newspapers with clickbait headlines
1900’s was radio
1950’s was TV
Now it’s social media
There’s always something. People who want to escape their lives will find a way. The solution is to make the world better, not to gripe about coping strategies.
You're right. But I don't think it means what you think it means. Consider the problem of gluttony, which has always been a human problem, but which has grown far worse with the advent of industrialized food processing. The feedback loop is very similar, in fact, to the entertainment/information feedback loop that began with the invention of writing. Plato wasn't wrong in kind, only in degree.
You can sort-of achieve a poor man's "on-demand" by providing bazillion cable channels, but real on-demand delivers a qualitative difference: you no longer schedule your life around your TV, but watch at your convenience.
Huh. Good point. If ever I have to explain it to my daughter (age 1.5) at some point, I'll probably have to say that a channel is like an unending YouTube livestream with pre-planned content...
Yup. I became a father in 2015. Bought a TV in 2019. Never got a cable connection. Just bought a FireTV stick and have never ever felt that I was missing something. My kid loves to speak to the remote and watch youtube cartoons.
My wife is into regional language soaps and there are a myriad of apps that stream them. I have Amazon Prime for my Seinfeld binges. Some movies that I ahem get from the interwebs, I stream from my PC using VLC player app.
And all this in India, with a capped (200 GB a month) broadband connection. Never once experienced delays / lagging / buffering. And the base cost is Amazon Prime (15 USD per year, plus it has Prime benefits, Prime music, etc), internet (12 USD per month), misc apps (30 USD per year).
On average, that is about 20 USD per month (but that includes cost for Internet that I would pay for anyway, so actual incremental cost is 5 USD per month), for almost unlimited content.
A standard Cable connection would alone cost me about 10 USD a month.
> The problem is that Apple’s financing programs — both the one pictured above, and also the iPhone Upgrade Program — continue to be funded by 3rd-parties; Apple is making it easier to buy an iPhone, but is still focused on getting its money right away. And, as long as it sticks with this approach, its Apple One bundle feels more like a money-grab, and less like a strategic driver of the business.
To me, I see this as a finance play. Since rates are near zero (and will be for some time), you can effectively leverage your revenues on both ends: servicing debt and factoring accounts receivable.
Since Apple's customers are usually high income buyers, the AR ratings are already high, combined with low rates, means Apple gets 95%+ of the revenues up front. I'm not sure what period for the new subscriptions they have (whether its a quarterly or annual period), but whatever it is, it's genius.
surprisingly, the apple card has ended up being a subprime card (https://www.businessinsider.com/apple-card-reportedly-approv...) and they unveiled the credit steps program to approve more low credit score customers, which is definitely not the customer demo i anticipated flocking to the card
The biggest reason for delay in the US is that the NFL signed a deal with DirecTV that goes from 2014-2022, and they signed it before the size of the streaming market was apparent.
So in baseball, you can get all games streamed for $60 a year. The NBA, you can get all games streamed for $60 a year. But for the NFL, most people can't get all NFL games streamed. You can get a DirecTV subscription, for something like $800 a year, and if you aren't in the DirecTV area you can pay $300 a year to watch NFL games. The cost is just way out of line, because it's priced by the DirecTV people, and their goal is to get you subscribed to DirecTV, not to help you cut the cord.
In a couple years I expect this deal will be renegotiated along lines similar to the other major American sports, and then it will be far easier to cut the cord for sports fans.
You can only do that for MLB, NBA, etc, if you're not in a the local area of the team you want to watch. You get blacked out if you are.
The local sports rights for non-NFL teams are tied up in long, long deals in many markets, and separately for each team. It will take a while to unwind all that.
Correction - MLB.tv is usually $125/year, and it does not include any of your local team's games if you live in the area. If you like following out-of-region teams, it's a great deal. If you want to follow your local team, you have to pony up a similar amount for a separate package that lets you stream local games.
I have just become a first-time cord cutter, if you can even call it that, with YouTube TV's recent opt-in inclusion of the RedZone channel. I still got way more (admittedly obscure) sports with my cable package, but this finally reached enough parity to move on.
The real reason that sports fans should remain with their traditional bundle is the UX. With cable, if I want to flip between a dozen college football games, no prob. The lack of a traditional remote and the channel-changing latency is a big problem with these new services. Also, they don't make it easy to record past the end just to be sure the game doesn't go long (granted they try to "catch up" by later learning it went long, but I hear it's often later and not when you want).
There is one feature I do appreciate, time-synced stats. You don't get spoilers on recorded games you're watching with their stat info in the app, it remains in sync w/ the progress. Granted, I don't see in-game stats as a killer feature anyways.
> The lack of a traditional remote and the channel-changing latency is a big problem with these new services
I may be in the minority here, but I really like the chromecast UX. So much easier to search on my phone - a familiar interface - than fiddle with a remote that I constantly lose, or is out of batteries, or lags with the TV, or makes it hard to scroll, or or or
> The real reason that sports fans should remain with their traditional bundle is the UX. With cable, if I want to flip between a dozen college football games, no prob.
What's most frustrating is being able to glimpse a better future and realizing that it's only business concerns that keep it from you. If you use the ESPN app on AppleTV (and probably other platforms, but I don't have any of them), you can easily swipe up to see what else is going at any one time, change between them, and even set up to four streams at once on your screen. It's awesome! Unless one of the games you care about is on Fox or CBS.
YouTube TV, Hulu Live TV, and the like are not what I would call “cord cutting”. They are using the same business model as cable and you still have a bundle of channels you don’t want.
Am I really a cord cutter with Hulu Live TV just because my TVs get TV streamed over an Ethernet cable (all of my TVs are connected to Ethernet directly or via a set top box) instead of coax?
I got Peacock Premium free with my Xfinity internet connection which has ~175 LIVE English Premier League matches streaming in USA. No need to now subscribe to NBC Sports!
Unfortunately they're trying to get you to subscribe to both Peacock and NBC Sports Gold. Most of the tops 6 teams matches going forward will be shown only occasionally on Peacock.
I agree but that maybe only for this PL season. I think they are gradually moving subscribers to Peacock and assuming they would only exclusively show all live PL games on Peacock service from next season onwards.
Hadn't considered how microsoft purchasing a major games studio might affect steam ? so yeah likely microsoft is the dark horse. at $15 for game pass, folks might all together forgo buying some titles on steam. me though hardly a gamer will stick to buying discounted games.
Right now I'm primarily using Game pass to play games on my Android phone, and at that it's doing a very good job. As a very surprising bonus, I saw flight simulator was included. This is downright aggressive of Microsoft. They're bundling a $60 game with a $15 a month service. Meaning even if you don't particularly like streaming games, you get your money's worth as long as every three months or so Microsoft adds another $60 game.
Of course since we all forget things, eventually you'll let Game pass keep recurring while sparsely using the service. This Gym like model is what every subscription service strives for.
I'm not complaining, if anything I might buy a new Xbox since I'm already entitled to tons of Gamepass games as well as Xbox live.
Edit: Might also just play everything on my PC. Good job Microsoft. Took them 3 generations , but they've finally merged the PC and console. Nothing on the Series X isn't coming to pick
He makes a bold assertion though that Microsoft will include new AAA titles from its various properties in Game Pass from day 1. I find that very doubtful, and so Steam's purpose will continue to be selling games for the first ~6 months of their release cycle (when the bulk of sales anyways happpen).
Day 1 releases is one of the main draws of Game Pass. The Game Pass marketing site [1] has an entire section labeled "Play Day One" that says
"Be among the first to play the latest titles from Xbox Game Studios and ID@Xbox, available to Xbox Game Pass members the same day as their global release."
One down side my son discovered recently is when he went to play red dead redemption 2, which he only recently started, and it had been pulled. It was a little frustrating. Otherwise game pass has been a pretty good value.
I would have liked an Apple Services bundle where I can pick and choose X number of services for a bundled price where the incentive would be tied to: the more (number of) services one chooses, more discount they'd get. Instead what we got is some random collection of services packaged by Apple being called Individual vs Family vs Premium that either won't exactly have Services that I need or have extras that I won't.
I emailed Tim Cook a few years ago as a shareholder and told him to get serious about gaming and content. Haha i highly highly doubt he ever saw it.
These gaming franchises are really the only thing bringing people to these platforms, and the one Achilles heel of the apple ecosystem.. even if apple developed its own franchises, just doing something to elevate gaming on the platform beyond a few indie games would be a long lasting competitive advantage.
People have been saying that gaming will doom Apple since PC gaming really became a thing in the early 90s with Wolfenstein and Doom. The entire PC industry is minuscule compared to the phone industry. The PC game industry is even smaller.
The best selling consoles of each generation usually don’t sell more in their entirety than Apple sell’s iPhones in two or three quarters.
"There are thousands of competitors in this highly-fragmented market vying to entertain consumers and low barriers to entry for those with great experiences."
Personally I think these kinds of bundles should be blocked by anti-trust action. They make it too difficult for smaller more innovative companies to compete in a meaningful way.
Tableau, which I believe is a more sophisticated data visualization application is getting squeezed out from enterprise accounts. Why? Because Power BI is "free".
Bundling is a huge power.