- Raymond James notes that a bundle created for college students by Spotify (Private:MUSIC) and Hulu (CMCSA -1.6%, DIS, FOX +0.8%, FOXA +0.8%, TWX +0.4%) will likely be at the forefront of a trend, with subscription services sprouting like weeds.
- The two companies will offer services that would cost $13/month on a stand-alone basis for just $4.99/month together, in a bundling move that's "frankly overdue" for media companies, says analyst Justin Patterson.
- Fragmentation among subscription media services is growing, and marketing them isn't cheap, he notes. And Spotify and Hulu can add customers through the deal since there's modest overlap for the two among millennials.
- Looking at other stocks, he notes Netflix (NFLX +3%) already struck a deal with T-Mobile (TMUS +0.2%) and so technically it's part of a bundle of sorts (not quite a content bundle like Spotify/Hulu), but that Netflix's competitive position is secure. And a relationship with Sirius XM (SIRI +0.8%) is a potential catalyst for Pandora (P -2.4%) as customers await possible bundles there.
- Now read: Disney 's Stock: Short-Term Challenges
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