Since 2011, Amazon has been at the forefront of offering free movies and shows to its Prime members. In recent years, other retailers and delivery platforms have recognized the potential of incorporating streaming services into their subscription models. As they seek new ways to attract and retain customers, many retailers are moving beyond traditional perks such as free delivery and discounts on gas and restaurants.
Kroger is one of the latest retailers to adopt this strategy, recently announcing a partnership with Disney to provide Kroger Boost members access to Disney+, Hulu, or ESPN+ as part of their membership.
For an annual fee of $99 or $59, Kroger Boost members will also benefit from services like free next-day delivery and extra fuel points. Stuart Aitken, Kroger’s senior vice president and chief merchant and marketing officer, stated that collaborating with Disney enhances the benefits for members, making the program more appealing.
Retailers Enhance Membership Programs by Bundling Streaming Services to Compete with Amazon
Walmart and Instacart are also exploring similar initiatives. Walmart has added a Paramount+ Essential subscription to its Walmart+ membership, while Instacart has partnered with Peacock to offer Peacock Premium to its Instacart+ members in the U.S. These developments are akin to mobile carriers bundling streaming services with their plans, as seen with Verizon and T-Mobile.
However, many of these bundled streaming options are ad-supported, highlighting a dual purpose: retailers are not only enhancing their membership programs but also helping streaming platforms expand their ad-supported offerings.
This strategy serves both retailers and streaming platforms. Eunice Shin, CEO of Elume Group, points out that boosting subscriber numbers is crucial for streaming services, as it increases their visibility to advertisers and allows them to charge higher rates based on audience size. Consequently, even subscribers receiving streaming services for free through retail memberships contribute valuable data to the advertising ecosystem, benefitting both retailers and streaming companies.
As competition intensifies, retailers are working to make their membership programs more attractive. Research shows that consumers are hesitant to cut back on streaming subscriptions, which encourages retailers to bundle these services with their offerings. By providing a wide range of benefits—including access to streaming—retailers aim to create compelling reasons for customers to stay subscribed. In doing so, they seek to build membership programs that rival Amazon’s successful model.
